CHAPTER 36 —CROP INSURANCE
SUBCHAPTER I—FEDERAL CROP INSURANCE
SUBCHAPTER II—SUPPLEMENTAL AGRICULTURAL DISASTER ASSISTANCE
SUBCHAPTER I—FEDERAL CROP INSURANCE
§1501. Short title and application of other provisions
This subchapter may be cited as the "Federal Crop Insurance Act". Except as otherwise expressly provided the provisions in titles I to IV, inclusive, shall not apply with respect to this subchapter, and the term "Act" wherever it appears in such titles shall not be construed to include this subchapter.
(Feb. 16, 1938, ch. 30, title V, §501,
Editorial Notes
References in Text
"Titles I to IV, inclusive," and "such titles", referred to in text, are references to titles I to IV of act Feb. 16, 1938, ch. 30,
Codification
Amendments
2008—
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date of 2000 Amendment
"(a)
"(b)
"(1) 2001
"(A) Subtitle C [§§131-134 of
"(B) Section 146 [amending
"(C) Section 163 [
"(2) 2001
"(A) Subsections (a), (b), and (c) of section 101 [amending
"(B) Section 102(a) [amending
"(C) Subsections (a), (b), and (c) of section 103 [amending
"(D) Section 104 [amending
"(E) Section 105(b) [amending
"(F) Section 108 [enacting
"(G) Section 109 [amending
"(H) Section 162 [amending
"(3) 2001
"(A) Section 101(d) [amending
"(B) Section 102(b) [amending
"(C) Section 103(d) [amending
Short Title of 2000 Amendment
Short Title of 1994 Amendment
Short Title of 1980 Amendment
Regulations
Savings Clause
"(1) continue to apply with respect to the 1999 crop year; and
"(2) apply with respect to the 2000 crop year, to the extent the application of an amendment made by this Act [probably means this title, see Tables for classification] is delayed under section 171(b) [set out as an Effective Date of 2000 Amendment note above] or by the terms of the amendment."
§1502. Purpose; definitions; protection of information; relation to other laws
(a) Purpose
It is the purpose of this subchapter to promote the national welfare by improving the economic stability of agriculture through a sound system of crop insurance and providing the means for the research and experience helpful in devising and establishing such insurance.
(b) Definitions
As used in this subchapter:
(1) Additional coverage
The term "additional coverage" means a plan of crop insurance coverage providing a level of coverage greater than the level available under catastrophic risk protection.
(2) Approved insurance provider
The term "approved insurance provider" means a private insurance provider that has been approved by the Corporation to provide insurance coverage to producers participating in the Federal crop insurance program established under this subchapter.
(3) Beginning farmer or rancher
The term "beginning farmer or rancher" means a farmer or rancher who has not actively operated and managed a farm or ranch with a bona fide insurable interest in a crop or livestock as an owner-operator, landlord, tenant, or sharecropper for more than 5 crop years, as determined by the Secretary.
(4) Board
The term "Board" means the Board of Directors of the Corporation established under
(5) Corporation
The term "Corporation" means the Federal Crop Insurance Corporation established under
(6) Cover crop termination
The term "cover crop termination" means a practice that historically and under reasonable circumstances results in the termination of the growth of a cover crop.
(7) Department
The term "Department" means the United States Department of Agriculture.
(8) Farm financial benchmarking
The term "farm financial benchmarking" means—
(A) the process of comparing the performance of an agricultural enterprise against the performance of other similar enterprises, through the use of comparable and reliable data, in order to identify business management strengths, weaknesses, and steps necessary to improve management performance and business profitability; and
(B) benchmarking of the type conducted by farm management and producer associations consistent with the activities described in or funded pursuant to
(9) Hemp
The term "hemp" has the meaning given the term in
(10) Loss ratio
The term "loss ratio" means the ratio of all sums paid by the Corporation as indemnities under any eligible crop insurance policy to that portion of the premium designated for anticipated losses and a reasonable reserve, other than that portion of the premium designated for operating and administrative expenses.
(11) Organic crop
The term "organic crop" means an agricultural commodity that is organically produced consistent with
(12) Secretary
The term "Secretary" means the Secretary of Agriculture.
(13) Transitional yield
The term "transitional yield" means the maximum average production per acre or equivalent measure that is assigned to acreage for a crop year by the Corporation in accordance with the regulations of the Corporation whenever the producer fails—
(A) to certify that acceptable documentation of production and acreage for the crop year is in the possession of the producer; or
(B) to present the acceptable documentation on the demand of the Corporation or an insurance company reinsured by the Corporation.
(14) Veteran farmer or rancher
The term "veteran farmer or rancher" means a farmer or rancher who—
(A) has served in the Armed Forces (as defined in
(B)(i) has not operated a farm or ranch;
(ii) has operated a farm or ranch for not more than 5 years; or
(iii) is a veteran (as defined in section 101 of that title) who has first obtained status as a veteran (as so defined) during the most recent 5-year period.
(c) Protection of confidential information
(1) General prohibition against disclosure
Except as provided in paragraph (2), the Secretary, any other officer or employee of the Department or an agency thereof, an approved insurance provider and its employees and contractors, and any other person may not disclose to the public information furnished by a producer under this subchapter.
(2) Authorized disclosure
(A) Disclosure in statistical or aggregate form
Information described in paragraph (1) may be disclosed to the public if the information has been transformed into a statistical or aggregate form that does not allow the identification of the person who supplied particular information.
(B) Consent of producer
A producer may consent to the disclosure of information described in paragraph (1). The participation of the producer in, and the receipt of any benefit by the producer under, this subchapter or any other program administered by the Secretary may not be conditioned on the producer providing consent under this paragraph.
(3) Violations; penalties
(4) Information
(A) Request
Subject to subparagraph (B), the Farm Service Agency shall, in a timely manner, provide to an agent or an approved insurance provider authorized by the producer any information (including Farm Service Agency Form 578s (or any successor form)) or maps (or any corrections to those forms or maps) that may assist the agent or approved insurance provider in insuring the producer under a policy or plan of insurance under this subchapter.
(B) Privacy
Except as provided in subparagraph (C), an agent or approved insurance provider that receives the information of a producer pursuant to subparagraph (A) shall treat the information in accordance with paragraph (1).
(C) Sharing
Nothing in this section prohibits the sharing of the information of a producer pursuant to subparagraph (A) between the agent and the approved insurance provider of the producer.
(d) Relation to other laws
(1) Terms and conditions of policies and plans
The terms and conditions of any policy or plan of insurance offered under this subchapter that is reinsured by the Corporation shall not—
(A) be subject to the jurisdiction of the Commodity Futures Trading Commission or the Securities and Exchange Commission; or
(B) be considered to be accounts, agreements (including any transaction that is of the character of, or is commonly known to the trade as, an "option", "privilege", "indemnity", "bid", "offer", "put", "call", "advance guaranty", or "decline guaranty"), or transactions involving contracts of sale of a commodity for future delivery, traded or executed on a contract market for the purposes of the Commodity Exchange Act (
(2) Effect on CFTC and Commodity Exchange Act
Nothing in this subchapter affects the jurisdiction of the Commodity Futures Trading Commission or the applicability of the Commodity Exchange Act (
(Feb. 16, 1938, ch. 30, title V, §502,
Editorial Notes
References in Text
The Commodity Exchange Act, referred to in subsec. (d)(1)(B), (2), is act Sept. 21, 1922, ch. 369,
Codification
Amendments
2018—Subsec. (b)(6) to (13).
Subsec. (b)(14).
2014—Subsec. (b)(3) to (6).
Subsec. (b)(7) to (10).
Subsec. (b)(11).
Subsec. (c)(4).
2008—
Subsec. (b)(7) to (9).
2000—Subsec. (c).
Subsec. (d).
1994—
1947—Act Aug. 1, 1947, amended section generally, restating purpose of chapter to improve all agriculture by crop insurance instead of being limited only to wheat.
1941—Act June 21, 1941, substituted "crop" for "wheat-crop" and "agricultural commodities" for "wheat".
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date of 1994 Amendment
§1503. Federal Crop Insurance Corporation; creation; offices
To carry out the purposes of this subchapter, there is hereby created as an agency of and within the Department a body corporate with the name "Federal Crop Insurance Corporation". The principal office of the Corporation shall be located in the District of Columbia, but there may be established agencies or branch offices elsewhere in the United States under rules and regulations prescribed by the Board.
(Feb. 16, 1938, ch. 30, title V, §503,
Editorial Notes
Codification
Amendments
2008—
1994—
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date of 1994 Amendment
Amendment by
Executive Documents
Transfer of Functions
Under authority of Ex. Ord. No. 9577, June 29, 1945, Secretary of Agriculture consolidated administration of program of Federal Crop Insurance Corporation in Production and Marketing Administration by Memorandum 1118, Aug. 18, 1945. 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Federal Crop Insurance Corporation consolidated with other agencies into Agricultural Conservation and Adjustment Administration for duration of war, see Ex. Ord. No. 9069.
§1504. Capital stock of Corporation
(a) Subscription by United States
The Corporation shall have a capital stock of $500,000,000 subscribed by the United States of America, payment for which shall, with the approval of the Secretary, be subject to call in whole or in part by the Board.
(b) Appropriations
There is authorized to be appropriated such sums as are necessary for the purpose of subscribing to the capital stock of the Corporation.
(c) Issuance of stock to Secretary of the Treasury
Receipts for payments by the United States of America for or on account of such stock shall be issued by the Corporation to the Secretary of the Treasury and shall be evidence of the stock ownership by the United States of America.
(d) Cancellation of receipts; nonliability of Corporation
Within thirty days after September 26, 1980, the Secretary of the Treasury shall cancel, without consideration, receipts for payments for or on account of the stock of the Corporation outstanding on September 26, 1980, and such receipts shall cease to be liabilities of the Corporation.
(Feb. 16, 1938, ch. 30, title V, §504,
Editorial Notes
Amendments
1994—Subsec. (a).
Subsec. (d).
1980—Subsec. (a).
Subsec. (d).
1977—Subsec. (a).
1949—Subsec. (a). Act Aug. 25, 1949, §4, struck out second sentence relating to restoration of impairment of capital stock.
Subsec. (b). Act Aug. 25, 1949, §6, authorized appropriations for subscribing to corporation's capital stock in order to offset losses suffered prior to time program was placed on an experimental basis in 1947.
Statutory Notes and Related Subsidiaries
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1980 Amendment
Cancellation of Outstanding Receipts for Stock in Excess of $27,000,000
Act Aug. 25, 1949, ch. 512, §5,
Institution of Expanded Program; Payment of Cost for Fiscal Year 1950
Act Aug. 25, 1949, ch. 512, §11,
Executive Documents
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
§1504a. Capitalization of Corporation
The payment for capital stock in the Federal Crop Insurance Corporation shall be effected by transfer of funds on the books of the Treasury Department to the credit of the Corporation.
(June 27, 1940, ch. 437, title I,
Editorial Notes
Codification
Section was not enacted as part of the Federal Crop Insurance Act which comprises this subchapter.
Executive Documents
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
§1505. Management of Corporation
(a) Board of Directors
(1) Establishment
The management of the Corporation shall be vested in a Board of Directors subject to the general supervision of the Secretary.
(2) Composition
The Board shall consist of only the following members:
(A) The manager of the Corporation, who shall serve as a nonvoting ex officio member.
(B) The Under Secretary of Agriculture responsible for the Federal crop insurance program.
(C) One additional Under Secretary of Agriculture (as designated by the Secretary).
(D) The Chief Economist of the Department of Agriculture.
(E) One person experienced in the crop insurance business.
(F) One person experienced in reinsurance or the regulation of insurance.
(G) Four active producers who are policy holders, are from different geographic areas of the United States, and represent a cross-section of agricultural commodities grown in the United States, including at least one specialty crop producer.
(3) Appointment of private sector members
The members of the Board described in subparagraphs (E), (F), and (G) of paragraph (2)—
(A) shall be appointed by, and hold office at the pleasure of, the Secretary;
(B) shall not be otherwise employed by the Federal Government;
(C) shall be appointed to staggered 4-year terms, as determined by the Secretary; and
(D) shall serve not more than two consecutive terms.
(4) Chairperson
The Board shall select a member of the Board to serve as Chairperson.
(b) Vacancies
Vacancies in the Board so long as there shall be four members in office shall not impair the powers of the Board to execute the functions of the Corporation, and four of the members in office shall constitute a quorum for the transaction of the business of the Board.
(c) Compensation
The Directors of the Corporation who are employed in the Department shall receive no additional compensation for their services as such Directors but may be allowed necessary traveling and subsistence expenses when engaged in business of the Corporation, outside of the District of Columbia. The Directors of the Corporation who are not employed by the Federal Government shall be paid such compensation for their services as Directors as the Secretary shall determine, but such compensation shall not exceed the daily equivalent of the rate prescribed for grade GS–18 under
(d) Manager of Corporation
The manager of the Corporation shall be its chief executive officer, with such power and authority as may be conferred by the Board. The manager shall be appointed by, and hold office at the pleasure of, the Secretary.
(e) Expert review of policies, plans of insurance, and related material
(1) Review by experts
The Board shall establish procedures under which any policy or plan of insurance, as well as any related material or modification of such a policy or plan of insurance, to be offered under this subchapter shall be subject to independent reviews by persons experienced as actuaries and in underwriting, as determined by the Board.
(2) Review of Corporation policies and plans
Except as provided in paragraph (3), the Board shall contract with at least five persons to each conduct a review of the policy or plan of insurance, of whom—
(A) not more than one person may be employed by the Federal Government; and
(B) at least one person must be designated by approved insurance providers pursuant to procedures determined by the Board.
(3) Review of private submissions
If the reviews under paragraph (1) cover a policy or plan of insurance, or any related material or modification of a policy or plan of insurance, submitted under
(A) the Board shall contract with at least five persons to each conduct a review of the policy or plan of insurance, of whom—
(i) not more than one person may be employed by the Federal Government; and
(ii) none may be employed by an approved insurance provider; and
(B) each review must be completed and submitted to the Board not later than 30 days prior to the end of the 120-day period described in
(4) Consideration of reviews
The Board shall include reviews conducted under this subsection as part of the consideration of any policy or plan or insurance, or any related material or modification of a policy or plan of insurance, proposed to be offered under this subchapter.
(5) Funding of reviews
Each contract to conduct a review under this subsection shall be funded from amounts made available under
(6) Relation to other authority
The contract authority provided in this subsection is in addition to any other contracting authority that may be exercised by the Board under
(Feb. 16, 1938, ch. 30, title V, §505,
Editorial Notes
Codification
Amendments
2008—Subsec. (e)(1), (4).
2000—
Subsec. (a).
Subsec. (e).
1994—Subsec. (a).
Subsec. (c).
Subsec. (d).
1980—Subsec. (a).
Subsec. (b).
Subsec. (c).
1949—Subsec. (c). Act Aug. 25, 1949, reduced compensation of members of Board of Directors who are not Government employees from "not to exceed $100 per day" to "not to exceed $50 per day", and changed from "subsistence expenses" to "transportation expenses and not to exceed $10 per diem".
1947—Act Aug. 1, 1947, amended section generally and, among other changes, increased membership of Board from three to five, provided for two members with insurance experience, not Government employees, increased from two to three the number of members necessary to carry on functions and to constitute a quorum, provided for compensation and expenses of Board members not otherwise Government employed, and for appointment of manager of corporation by the Secretary of Agriculture instead of being selected by the Board.
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Appointment of Board of Directors Beginning February 1, 2001
"(2)
"(3)
References in Other Laws to GS–16, 17, or 18 Pay Rates
References in laws to the rates of pay for GS–16, 17, or 18, or to maximum rates of pay under the General Schedule, to be considered references to rates payable under specified sections of Title 5, Government Organization and Employees, see section 529 [title I, §101(c)(1)] of
Executive Documents
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
§1506. General powers
(a) Succession
The Corporation shall have succession in its corporate name.
(b) Corporate seal
The Corporation may adopt, alter, and use a corporate seal, which shall be judicially noticed.
(c) Property
The Corporation may purchase or lease and hold such real and personal property as it deems necessary or convenient in the transaction of its business, and may dispose of such property held by it upon such terms as it deems appropriate.
(d) Suit
Subject to
(e) Bylaws and regulations
The Corporation may adopt, amend, and repeal bylaws, rules, and regulations governing the manner in which its business may be conducted and the powers granted to it by law may be exercised and enjoyed.
(f) Mails
The Corporation shall be entitled to the use of the United States mails in the same manner as the other executive agencies of the Government.
(g) Assistance
The Corporation, with the consent of any board, commission, independent establishment, or executive department of the Government, including any field service thereof, may avail itself of the use of information, services, facilities, officials, and employees thereof in carrying out the provisions of this subchapter.
(h) Collection and sharing of information
(1) Surveys and investigations
The Corporation may conduct surveys and investigations relating to crop insurance, agriculture-related risks and losses, and other issues related to carrying out this subchapter.
(2) Data collection
(A) In general
The Corporation shall assemble data for the purpose of establishing sound actuarial bases for insurance on agricultural commodities.
(B) National Agricultural Statistics Service
Data collected by the National Agricultural Statistics Service, whether published or unpublished, shall be—
(i) provided in an aggregate form to the Corporation for the purpose of providing insurance under this subchapter; and
(ii) kept confidential by the Corporation in the same manner and to the same extent as is required under—
(I)
(II) the Confidential Information Protection and Statistical Efficiency Act of 2002 (
(C) Noninsured crop disaster assistance program
In collecting data under this subsection, the Secretary shall ensure that—
(i) appropriate data are collected through the noninsured crop disaster assistance program established by
(ii) not less frequently than annually, the Farm Service Agency shares, and the Corporation considers, the data described in clause (i).
(3) Sharing of records
Notwithstanding
(i) Expenditures
The Corporation shall determine the character and necessity for its expenditures under this subchapter and the manner in which they shall be incurred, allowed, and paid, without regard to the provisions of any other laws governing the expenditure of public funds and such determinations shall be final and conclusive upon all other officers of the Government.
(j) Settling claims
The Corporation shall have the authority to make final and conclusive settlement and adjustment of any claim by or against the Corporation or a fiscal officer of the Corporation.
(k) Other powers
The Corporation shall have such powers as may be necessary or appropriate for the exercise of the powers herein specifically conferred upon the Corporation and all such incidental powers as are customary in corporations generally.
(l) Contracts
The Corporation may enter into and carry out contracts or agreements, and issue regulations, necessary in the conduct of its business, as determined by the Board. State and local laws or rules shall not apply to contracts, agreements, or regulations of the Corporation or the parties thereto to the extent that such contracts, agreements, or regulations provide that such laws or rules shall not apply, or to the extent that such laws or rules are inconsistent with such contracts, agreements, or regulations.
(m) Submission of certain information
(1) Social security account and employer identification numbers
The Corporation shall require, as a condition of eligibility for participation in the multiple peril crop insurance program, submission of social security account numbers, subject to the requirements of section 405(c)(2)(C)(iii) 2 of title 42, and employer identification numbers, subject to the requirements of
(2) Notification by policyholders
Each policyholder shall notify each individual or other entity that acquires or holds a substantial beneficial interest in such policyholder of the requirements and limitations under this subchapter.
(3) Identification of holders of substantial interests
The Manager of the Corporation may require each policyholder to provide to the Manager, at such times and in such manner as prescribed by the Manager, the name of each individual that holds or acquires a substantial beneficial interest in the policyholder.
(4) "Substantial beneficial interest" defined
For purposes of this subsection, the term "substantial beneficial interest" means not less than 5 percent of all beneficial interests in the policyholder.
(n) Actuarial soundness
(1) Projected loss ratio as of October 1, 1995
The Corporation shall take such actions as are necessary to improve the actuarial soundness of Federal multiperil crop insurance coverage made available under this subchapter to achieve, on and after October 1, 1995, an overall projected loss ratio of not greater than 1.1, including—
(A) instituting appropriate requirements for documentation of the actual production history of insured producers to establish recorded or appraised yields for Federal crop insurance coverage that more accurately reflect the associated actuarial risk, except that the Corporation may not carry out this paragraph in a manner that would prevent beginning farmers (as defined by the Secretary) from obtaining Federal crop insurance;
(B) establishing in counties, to the extent practicable, a crop insurance option based on area yields in a manner that allows an insured producer to qualify for an indemnity if a loss has occurred in a specified area in which the farm of the insured producer is located;
(C) establishing a database that contains the social security account and employee identification numbers of participating producers, agents, and loss adjusters and using the numbers to identify insured producers, agents, and loss adjusters who are high risk for actuarial purposes and insured producers who have not documented at least 4 years of production history, to assess the performance of insurance providers, and for other purposes permitted by law; and
(D) taking any other measures authorized by law to improve the actuarial soundness of the Federal crop insurance program while maintaining fairness and effective coverage for agricultural producers.
(2) Projected loss ratio
The Corporation shall take such actions, including the establishment of adequate premiums, as are necessary to improve the actuarial soundness of Federal multiperil crop insurance made available under this subchapter to achieve an overall projected loss ratio of not greater than 1.0.
(3) Nonstandard classification system
To the extent that the Corporation uses the nonstandard classification system, the Corporation shall apply the system to all insured producers in a fair and consistent manner.
(o) Regulations
The Secretary and the Corporation are each authorized to issue such regulations as are necessary to carry out this subchapter.
(p) Purchase of American-made equipment and products
(1) Sense of Congress
It is the sense of Congress that, to the greatest extent practicable, all equipment and products purchased by the Corporation using funds made available to the Corporation should be American-made.
(2) Notice requirement
In providing financial assistance to, or entering into any contract with, any entity for the purchase of equipment and products to carry out this subchapter, the Corporation, to the greatest extent practicable, shall provide to the entity a notice describing the statement made in paragraph (1).
(r) 3 Procedures for responding to certain inquiries
(1) Procedures required
The Corporation shall establish procedures under which the Corporation will provide a final agency determination in response to an inquiry regarding the interpretation by the Corporation of this subchapter or any regulation issued under this subchapter.
(2) Implementation
Not later than 180 days after June 23, 1998, the Corporation shall issue regulations to implement this subsection. At a minimum, the regulations shall establish—
(A) the manner in which inquiries described in paragraph (1) are required to be submitted to the Corporation; and
(B) a reasonable maximum number of days within which the Corporation will respond to all inquiries.
(3) Effect of failure to timely respond
If the Corporation fails to respond to an inquiry in accordance with the procedures established pursuant to this subsection, the person requesting the interpretation of this subchapter or regulation may assume the interpretation is correct for the applicable reinsurance year.
(Feb. 16, 1938, ch. 30, title V, §506,
Editorial Notes
References in Text
The Confidential Information Protection and Statistical Efficiency Act of 2002, referred to in subsec. (h)(2)(B)(ii)(II), is title V of
Codification
Amendments
2018—Subsec. (h)(2).
Subsec. (h)(3).
2008—Subsec. (d).
Subsecs. (g) to (i), (m).
Subsec. (n).
Subsec. (n)(1).
Subsec. (n)(2).
Subsecs. (o), (p).
Subsec. (q).
Subsec. (r).
2000—Subsec. (h).
Subsecs. (q) to (s).
1998—Subsec. (s).
1994—Subsec. (d).
Subsec. (j).
Subsec. (k).
Subsec. (l).
Subsec. (m).
Subsec. (n).
Subsec. (n)(1)(B).
Subsec. (o).
Subsec. (o)(1).
Subsec. (o)(1)(A).
Subsec. (o)(1)(B).
Subsec. (o)(1)(C).
Subsec. (o)(1)(D).
Subsec. (o)(2) to (4).
Subsecs. (p) to (r).
1993—Subsec. (n).
1991—Subsec. (d).
Subsec. (m)(1).
1990—
Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Subsec. (e).
Subsec. (f).
Subsec. (g).
Subsec. (h).
Subsec. (i).
Subsec. (j).
Subsec. (k).
Subsec. (l).
Subsec. (m).
1980—Subsec. (c).
Subsec. (d).
Subsec. (f).
Subsec. (h).
Subsec. (k).
1949—Subsec. (h). Act Aug. 25, 1949, struck out obsolete language and included authority for a study of the possibility of developing some type of livestock insurance.
1947—Subsec. (d). Act Aug. 1, 1947, provided for suits in State courts of general jurisdiction or in United States district courts regardless of amount in controversy.
1941—Subsec. (h). Act June 21, 1941, substituted "and preparatory to the application of the chapter to other basic commodities when so provided by law, shall assemble data relative to field corn, for the purpose of establishing a satisfactory actuarial basis for such commodity" for "for wheat and other agricultural commodities."
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date of 1998 Amendment
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1993 Amendment
Effective Date of 1980 Amendment
Amendment by
Regulations
Required Terms and Conditions of Standard Reinsurance Agreements
"(a)
"(b)
"(1)
"(2)
"(A) Section II, concerning the terms of reinsurance and underwriting gain and loss for an approved insurance provider.
"(B) Section III, concerning the terms for subsidies and administrative fees for an approved insurance provider.
"(C) Section IV, concerning the terms for loss adjustment for an approved insurance provider under catastrophic risk protection.
"(D) Section V.C., concerning interest payments between the Corporation and an approved insurance provider.
"(E) Section V.I.5., concerning liquidated damages.
"(c)
Crop Insurance Provider Evaluation
"(a)
"(b)
"(c)
"(d)
"(1) consider the changes made by the Corporation in response to increased program participation resulting from the enactment of this Act;
"(2) include an evaluation and opinion of the accuracy and reasonableness of—
"(A) the average actual costs for approved insurance providers to deliver multiple peril crop insurance;
"(B) the cost per policy of complying with the requirements, regulations, procedures, and processes of the Federal Crop Insurance Act;
"(C) the cost differences for various provider firm sizes and any business delivered by the Federal Government;
"(D) the adequacy of the standard reimbursement for potential new providers; and
"(E) the identification of any new costs related to the enactment of this Act not previously identified in the information reported by the providers;
"(3) compare delivery costs of multiple peril crop insurance to other insurance coverages that the provider may sell and determine the extent, if any, to which any funds provided to carry out the Federal Crop Insurance Act are being used to fund any other business enterprise operated by the provider;
"(4)(A) assess alternative methods for reimbursing providers for reasonable and necessary expenses associated with delivery of multiple peril crop insurance;
"(B) recommend changes under this paragraph that reasonably demonstrate the need to achieve the greatest operating efficiencies on the part of the provider and the Corporation has been recognized; and
"(C) identify areas for improved operating efficiencies, if any, in the requirements made by the Corporation for compliance and program integrity;
"(5) assess the potential for alternative forms of reinsurance arrangements for providers of different firm sizes, taking into consideration—
"(A) the need to achieve a reasonable return on the capital of the provider compared to other lines of insurance;
"(B) the relative risk borne by the provider for the different lines of insurance;
"(C) the availability and price of commercial reinsurance; and
"(D) any additional costs that may be incurred by the Federal Government in carrying out the Federal Crop Insurance Act; and
"(6) include an analysis of the effect of the current or proposed reinsurance arrangements on providers having different business levels.
"(e)
"(1)
"(2)
Executive Documents
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
2 See References in Text note below.
3 So in original. Probably should be "(q)".
§§1506a, 1506b. Omitted
Editorial Notes
Codification
Section 1506a, act July 30, 1947, ch. 356, title II, §202,
Section 1506b, acts June 29, 1954, ch. 409, title II, §201,
§1507. Personnel of Corporation
(a) Appointment; civil service exemption; compensation
The Secretary shall appoint such officers and employees as may be necessary for the transaction of the business of the Corporation pursuant to civil-service laws and regulations, fix their compensation in accordance with the provisions of
(b) Application of employees' compensation law
Insofar as applicable, the benefits of subchapter I of
(c) Use of associations of producers and private insurance companies; payment of administrative and program expenses; sale of crop insurance through private agents and brokers: renewals, exclusion of compensation from premium rates, indemnification for errors or omissions of Commission or its contractors
In the administration of this subchapter, the Board shall, to the maximum extent possible, (1) establish or use committees or associations of producers and make payments to them to cover the administrative and program expenses, as determined by the Board, incurred by them in cooperating in carrying out this subchapter, (2) contract with private insurance companies, private rating bureaus, and other organizations as appropriate for actuarial services, services relating to loss adjustment and rating plans of insurance, and other services to avoid duplication by the Federal Government of services that are or may readily be available in the private sector and to enable the Corporation to concentrate on regulating the provision of insurance under this subchapter and evaluating new products and materials submitted under
(d) Allotment of funds to Federal and State agencies
The Secretary may allot to bureaus and offices of the Department or transfer to such other agencies of the State and Federal Governments that the Secretary requests to assist in carrying out this subchapter any funds made available pursuant to the provisions of
(e) Utilization of producer cooperative associations
In carrying out the provisions of this subchapter the Board may, in its discretion, utilize producer-owned and producer-controlled cooperative associations.
(f) Use of resources, data, boards, and committees of Federal agencies
If the Board determines it is necessary, the Board shall use, to the maximum extent practicable, the resources, data, boards, and the committees of—
(1) the Natural Resources Conservation Service, in assisting the Board in—
(A) the classification of land as to risk and production capability; and
(B) the consideration of acceptable conservation practices, including good farming practices with respect to conservation (such as cover crop termination);
(2) the Forest Service, in assisting the Board in the development of a timber insurance plan;
(3) the Farm Service Agency, in assisting the Board in—
(A) the determination of individual producer yields;
(B) sharing information on beginning farmers and ranchers and veteran farmers and ranchers;
(C) investigating potential waste, fraud, or abuse;
(D) sharing information to support the transition of crops and counties from the noninsured crop disaster assistance program established by
(E) serving as a local point of contact for the dissemination of information on risk management options available to farmers and ranchers; and
(4) other Federal agencies, in assisting the Board in any way the Board determines is necessary in carrying out this subchapter.
(g) Specialty Crops Coordinator
(1)
(2) The Specialty Crops Coordinator shall have primary responsibility for addressing the needs of specialty crop producers, and for providing information and advice, in connection with the activities of the Corporation to improve and expand the insurance program for specialty crops. In carrying out this paragraph, the Specialty Crops Coordinator shall act as the liaison of the Corporation with representatives of specialty crop producers and assist the Corporation with the knowledge, expertise, and familiarity of the producers with risk management and production issues pertaining to specialty crops.
(3) The Specialty Crops Coordinator shall use information collected from Corporation field office directors in States in which specialty crops have a significant economic effect and from other sources, including the extension service and colleges and universities.
(4)
(A) designate a Specialty Crops Liaison in each regional field office; and
(B) share the contact information of the Specialty Crops Liaisons with specialty crop producers.
(5)
(Feb. 16, 1938, ch. 30, title V, §507,
Editorial Notes
Codification
In subsec. (a), "
Provisions that authorized personnel paid by the hour, day, or month when actually employed, and county crop insurance committeemen to have their compensation fixed without regard to "the Classification Act of 1923, as amended" were omitted as obsolete. Sections 1202 and 1204 of the Classification Act of 1949,
In subsec. (b), reference to "subchapter I of
Amendments
2018—Subsec. (f).
Subsec. (g).
2008—Subsecs. (b) to (f).
2000—Subsec. (c).
1994—Subsec. (a).
Subsec. (c).
Subsec. (d).
Subsec. (g).
1991—Subsec. (c).
1990—Subsec. (c).
1980—Subsec. (c).
Subsec. (f).
1972—Subsec. (a).
1949—Act Oct. 28, 1949, substituted "Classification Act of 1949" for "Classification Act of 1923".
Act Aug. 25, 1949, inserted requirement that officers and employees be appointed subject to civil service laws and regulations, and exempted personnel paid by hour, day, or month when employed, and county crop-insurance committeemen from civil-service laws and regulations or the Classification Act of 1923.
1947—Act Aug. 1, 1947, provided for selection and designation of county employees and agencies and their direct responsibility.
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Repeals
Act Oct. 28, 1949, ch. 782, cited as a credit to this section, was repealed (subject to a savings clause) by
Executive Documents
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
§1508. Crop insurance
(a) Authority to offer insurance
(1) In general
If sufficient actuarial data are available (as determined by the Corporation), the Corporation may insure, or provide reinsurance for insurers of, producers of agricultural commodities grown in the United States under 1 or more plans of insurance determined by the Corporation to be adapted to the agricultural commodity concerned. To qualify for coverage under a plan of insurance, the losses of the insured commodity must be due to drought, flood, or other natural disaster (as determined by the Secretary).
(2) Period
Except in the cases of tobacco, potatoes, sweet potatoes, and hemp, insurance shall not extend beyond the period during which the insured commodity is in the field. As used in the preceding sentence, in the case of an aquacultural species, the term "field" means the environment in which the commodity is produced.
(3) Exclusion of losses due to certain actions of producer
(A) Exclusions
Insurance provided under this subsection shall not cover losses due to—
(i) the neglect or malfeasance of the producer;
(ii) the failure of the producer to reseed to the same crop in such areas and under such circumstances as it is customary to reseed; or
(iii) the failure of the producer to follow good farming practices, including scientifically sound sustainable and organic farming practices.
(B) Good farming practices determination review
(i) Informal administrative process
A producer shall have the right to a review of a determination regarding good farming practices made under subparagraph (A)(iii) in accordance with an informal administrative process to be established by the Corporation.
(ii) Administrative review
(I) No adverse decision
The determination shall not be considered an adverse decision for purposes of subtitle H of the Department of Agriculture Reorganization Act of 1994 (
(II) Reversal or modification
Except as provided in clause (i), the determination may not be reversed or modified as the result of a subsequent administrative review.
(iii) Judicial review
(I) Right to review
A producer shall have the right to judicial review of the determination without exhausting any right to a review under clause (i).
(II) Reversal or modification
The determination may not be reversed or modified as the result of judicial review unless the determination is found to be arbitrary or capricious.
(C) Limitation on revenue coverage for potatoes
No policy or plan of insurance provided under this subchapter (including a policy or plan of insurance approved by the Board under subsection (h)) shall cover losses due to a reduction in revenue for potatoes except as covered under a whole farm policy or plan of insurance, as determined by the Corporation.
(4) Expansion to other areas or single producers
(A) Area expansion
The Corporation may offer plans of insurance or reinsurance for production of agricultural commodities in the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau in the same manner as provided in this section for production of agricultural commodities in the United States.
(B) Producer expansion
In an area in the United States or specified in subparagraph (A) where crop insurance is not available for a particular agricultural commodity, the Corporation may offer to enter into a written agreement with an individual producer operating in the area for insurance coverage under this subchapter if the producer has actuarially sound data relating to the production by the producer of the commodity or similar commodities and the data is acceptable to the Corporation.
(5) Dissemination of crop insurance information
(A) Available information
The Corporation shall make available to producers through local offices of the Department—
(i) current and complete information on all aspects of Federal crop insurance; and
(ii) a listing of insurance agents and companies offering to sell crop insurance in the area of the producers.
(B) Use of electronic methods
(i) Dissemination by Corporation
The Corporation shall make the information described in subparagraph (A) available electronically to producers and approved insurance providers.
(ii) Submission to Corporation
To the maximum extent practicable, the Corporation shall allow producers and approved insurance providers to use electronic methods to submit information required by the Corporation.
(6) Addition of new and specialty crops (including value-added crops)
(A) Annual review
Not later than 1 year after December 20, 2018, and annually thereafter, the manager of the Corporation shall prepare, to the maximum extent practicable, based on data shared from the noninsured crop disaster assistance program established by
(i) Research and development for a policy or plan of insurance for a commodity for which there is no existing policy or plan of insurance.
(ii) Expansion of an existing policy or plan of insurance to additional counties or States, including malting barley endorsements or contract options.
(iii) Research and development for a new policy or plan of insurance, or endorsement, for commodities with existing policies or plans of insurance, such as dollar plans.
(B) Report
Not later than 1 year after October 13, 1994, and annually thereafter, the Corporation shall report to Congress on the progress and expected timetable for expanding crop insurance coverage under this subchapter to new and specialty crops.
(7) Adequate coverage for States and underserved producers
(A) Definitions
In this paragraph:
(i) Adequately served
The term "adequately served" means having a participation rate, by crop, that is at least 50 percent of the national average participation rate.
(ii) Underserved producer
The term "underserved producer" means an individual (including a member of an Indian Tribe) that is—
(I) a beginning farmer or rancher;
(II) a veteran farmer or rancher; or
(III) a socially disadvantaged farmer or rancher.
(B) Review
Using resources and information available to the Board or the Secretary, the Board shall review the policies and plans of insurance that are offered by approved insurance providers under this subchapter, including policies and plans of insurance for underserved producers, to determine if each State is adequately served by the policies and plans of insurance.
(C) Report
(i) In general
Not later than 30 days after completion of the review under subparagraph (B), and not less frequently than once every 3 years thereafter, the Board shall make publicly available and submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report describing the results of the review.
(ii) Recommendations
The report under clause (i) shall include recommendations to increase participation in States and among underserved producers that are not adequately served by the policies and plans of insurance, including any plans for administrative action or recommendations for Congressional action.
(8) Special provisions for cotton and rice
Notwithstanding any other provision of this subchapter, beginning with the 2001 crops of upland cotton, extra long staple cotton, and rice, the Corporation shall offer plans of insurance, including prevented planting coverage and replanting coverage, under this subchapter that cover losses of upland cotton, extra long staple cotton, and rice resulting from failure of irrigation water supplies due to drought and saltwater intrusion.
(9) Premium adjustments
(A) Prohibition
Except as provided in subparagraph (B), no person shall pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, either as an inducement to procure insurance or after insurance has been procured, any rebate, discount, abatement, credit, or reduction of the premium named in an insurance policy or any other valuable consideration or inducement not specified in the policy.
(B) Exceptions
Subparagraph (A) does not apply with respect to—
(i) a payment authorized under subsection (b)(5)(B);
(ii) a performance-based discount authorized under subsection (d)(3); or
(iii) a patronage dividend, or similar payment, that is paid—
(I) by an entity that was approved by the Corporation to make such payments for the 2005, 2006, or 2007 reinsurance year, in accordance with subsection (b)(5)(B) as in effect on the day before the date of enactment of this paragraph; and
(II) in a manner consistent with the payment plan approved in accordance with that subsection for the entity by the Corporation for the applicable reinsurance year.
(C) Publication of violations
(i) Publication required
Subject to clause (ii), the Corporation shall publish in a timely manner on the website of the Risk Management Agency information regarding each violation of this paragraph, including any sanctions imposed in response to the violation, in sufficient detail so that the information may serve as effective guidance to approved insurance providers, agents, and producers.
(ii) Protection of privacy
In providing information under clause (i) regarding violations of this paragraph, the Corporation shall redact the identity of the persons and entities committing the violations in order to protect the privacy of those persons and entities.
(10) Commissions
(A) Definition of immediate family
In this paragraph, the term "immediate family" means an individual's father, mother, stepfather, stepmother, brother, sister, stepbrother, stepsister, son, daughter, stepson, stepdaughter, grandparent, grandson, granddaughter, father-in-law, mother-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-law, the spouse of the foregoing, and the individual's spouse.
(B) Prohibition
No individual (including a subagent) may receive directly, or indirectly through an entity, any compensation (including any commission, profit sharing, bonus, or any other direct or indirect benefit) for the sale or service of a policy or plan of insurance offered under this subchapter if—
(i) the individual has a substantial beneficial interest, or a member of the individual's immediate family has a substantial beneficial interest, in the policy or plan of insurance; and
(ii) the total compensation to be paid to the individual with respect to the sale or service of the policies or plans of insurance that meet the condition described in clause (i) exceeds 30 percent or the percentage specified in State law, whichever is less, of the total of all compensation received directly or indirectly by the individual for the sale or service of all policies and plans of insurance offered under this subchapter for the reinsurance year.
(C) Reporting
Not later than 90 days after the annual settlement date of the reinsurance year, any individual that received directly or indirectly any compensation for the service or sale of any policy or plan of insurance offered under this subchapter in the prior reinsurance year shall certify to applicable approved insurance providers that the compensation that the individual received was in compliance with this paragraph.
(D) Sanctions
The procedural requirements and sanctions prescribed in
(E) Applicability
(i) In general
Sanctions for violations under this paragraph shall only apply to the individuals or entities directly responsible for the certification required under subparagraph (C) or the failure to comply with the requirements of this paragraph.
(ii) Prohibition
No sanctions shall apply with respect to the policy or plans of insurance upon which compensation is received, including the reinsurance for those policies or plans.
(11) Cover crops
(A) In general
The voluntary practice of cover cropping shall be considered a good farming practice under paragraph (3)(A)(iii) if the cover crop is terminated in accordance with subparagraph (B).
(B) Termination
(i) In general
The termination of a cover crop shall be carried out according to—
(I) guidelines established by the Secretary; or
(II) an exception to the guidelines approved under clause (ii).
(ii) Exception to guidelines
The Corporation shall approve an exception to the guidelines under clause (i)(I) if that exception is recommended by—
(I) the Natural Resources Conservation Service; or
(II) an agricultural expert, as determined by the Corporation, unless the exception is determined to be unreasonable by the Corporation.
(C) Insurability of subsequent crop
Cover crop termination shall not affect the insurability of a subsequently planted insurable crop if the cover crop is terminated in accordance with subparagraph (B).
(D) Summer fallow
In a county in which summer fallow is an insurable practice, a cover crop in that county that is terminated in accordance with subparagraph (B) shall be considered as summer fallow for the purpose of insurability.
(b) Catastrophic risk protection
(1) Coverage availability
The Corporation shall offer a catastrophic risk protection plan to indemnify producers for crop loss due to loss of yield or prevented planting, if provided by the Corporation, when the producer is unable, because of drought, flood, or other natural disaster (as determined by the Secretary), to plant other crops for harvest on the acreage for the crop year.
(2) Amount of coverage
(A) In general
Subject to subparagraph (B)—
(i) in the case of each of the 1995 through 1998 crop years, catastrophic risk protection shall offer a producer coverage for a 50 percent loss in yield, on an individual yield or area yield basis, indemnified at 60 percent of the expected market price, or a comparable coverage (as determined by the Corporation); and
(ii) in the case of each of the 1999 and subsequent crop years, catastrophic risk protection shall offer a producer coverage for a 50 percent loss in yield, on an individual yield or area yield basis, indemnified at 55 percent of the expected market price, or a comparable coverage (as determined by the Corporation).
(B) Reduction in actual payment
The amount paid to a producer on a claim under catastrophic risk protection may reflect a reduction that is proportional to the out-of-pocket expenses that are not incurred by the producer as a result of not planting, growing, or harvesting the crop for which the claim is made, as determined by the Corporation.
(3) Alternative catastrophic coverage
Beginning with the 2001 crop year, the Corporation shall offer producers of an agricultural commodity the option of selecting either of the following:
(A) The catastrophic risk protection coverage available under paragraph (2)(A).
(B) An alternative catastrophic risk protection coverage that—
(i) indemnifies the producer on an area yield and loss basis if such a policy or plan of insurance is offered for the agricultural commodity in the county in which the farm is located;
(ii) provides, on a uniform national basis, a higher combination of yield and price protection than the coverage available under paragraph (2)(A); and
(iii) the Corporation determines is comparable to the coverage available under paragraph (2)(A) for purposes of subsection (e)(2)(A).
(4) Sale of catastrophic risk coverage
(A) In general
Catastrophic risk coverage may be offered by—
(i) approved insurance providers, if available in an area; and
(ii) at the option of the Secretary that is based on considerations of need, local offices of the Department.
(B) Need
For purposes of considering need under subparagraph (A)(ii), the Secretary may take into account the most efficient and cost-effective use of resources, the availability of personnel, fairness to local producers, the needs and convenience of local producers, and the availability of private insurance carriers.
(C) Delivery of coverage
(i) In general
In full consultation with approved insurance providers, the Secretary may continue to offer catastrophic risk protection in a State (or a portion of a State) through local offices of the Department if the Secretary determines that there is an insufficient number of approved insurance providers operating in the State or portion of the State to adequately provide catastrophic risk protection coverage to producers.
(ii) Coverage by approved insurance providers
To the extent that catastrophic risk protection coverage by approved insurance providers is sufficiently available in a State (or a portion of a State) as determined by the Secretary, only approved insurance providers may provide the coverage in the State or portion of the State.
(iii) Timing of determinations
Not later than 90 days after April 4, 1996, the Secretary shall announce the results of the determinations under clause (i) for policies for the 1997 crop year. For subsequent crop years, the Secretary shall make the announcement not later than April 30 of the year preceding the year in which the crop will be produced, or at such other times during the year as the Secretary finds practicable in consultation with affected crop insurance providers for those States (or portions of States) in which catastrophic coverage remains available through local offices of the Department.
(iv) Current policies
This clause shall take effect beginning with the 1997 crop year. Subject to clause (ii) all catastrophic risk protection policies written by local offices of the Department shall be transferred to the approved insurance provider for performance of all sales, service, and loss adjustment functions. Any fees in connection with such policies that are not yet collected at the time of the transfer shall be payable to the approved insurance providers assuming the policies. The transfer process for policies for the 1997 crop year with sales closing dates before January 1, 1997, shall begin at the time of the Secretary's announcement under clause (iii) and be completed by the sales closing date for the crop and county. The transfer process for all subsequent policies (including policies for the 1998 and subsequent crop years) shall begin at a date that permits the process to be completed not later than 45 days before the sales closing date.
(5) Administrative fee
(A) Basic fee
Each producer shall pay an administrative fee for catastrophic risk protection in the amount of $655 per crop per county.
(B) Payment of catastrophic risk protection fee on behalf of producers
(i) Payment authorized
If State law permits a licensing fee to be paid by an insurance provider to a cooperative association or trade association and rebated to a producer through the payment of catastrophic risk protection administrative fees, a cooperative association or trade association located in that State may pay, on behalf of a member of the association in that State or a contiguous State who consents to be insured under such an arrangement, all or a portion of the administrative fee required by this paragraph for catastrophic risk protection.
(ii) Selection of provider
Nothing in this subparagraph limits the option of a producer to select the licensed insurance agent or other approved insurance provider from whom the producer will purchase a policy or plan of insurance or to refuse coverage for which a payment is offered to be made under clause (i).
(iii) Delivery of insurance
Catastrophic risk protection coverage for which a payment is made under clause (i) shall be delivered by a licensed insurance agent or other approved insurance provider.
(iv) Additional coverage encouraged
A cooperative association or trade association, and any approved insurance provider with whom a licensing fee is made, shall encourage producer members to purchase appropriate levels of coverage in order to meet the risk management needs of the member producers.
(C) Time for payment
The administrative fee required by this paragraph shall be paid by the producer on the same date on which the premium for a policy of additional coverage would be paid by the producer.
(D) Use of fees
(i) In general
The amounts paid under this paragraph shall be deposited in the crop insurance fund established under
(ii) Limitation
No funds deposited in the crop insurance fund under this subparagraph may be used to compensate an approved insurance provider or agent for the delivery of services under this subsection.
(E) Waiver of fee
(i) In general
The Corporation shall waive the amounts required under this paragraph for limited resource farmers and beginning farmers or ranchers, as defined by the Corporation, and veteran farmers or ranchers.
(ii) Coordination
The Corporation shall coordinate with other agencies of the Department that provide programs or services to farmers and ranchers described in clause (i) to make available coverage under the waiver under that clause and to share eligibility information to reduce paperwork and avoid duplication.
(6) Participation requirement
A producer may obtain catastrophic risk coverage for a crop of the producer on land in the county only if the producer obtains the coverage for the crop on all insurable land of the producer in the county.
(7) Limitation due to risk
The Corporation may limit catastrophic risk coverage in any county or area, or on any farm, on the basis of the insurance risk concerned.
(8) Transitional coverage for 1995 crops
Effective only for a 1995 crop planted or for which insurance attached prior to January 1, 1995, the Corporation shall allow producers of the crops until not later than the end of the 180-day period beginning on the date of enactment of the Federal Crop Insurance Reform Act of 1994 [Oct. 13, 1994] to obtain catastrophic risk protection for the crop. On enactment of such Act, a producer who made timely purchases of a crop insurance policy before the date of enactment of such Act, under the provisions of this subchapter then in effect, shall be eligible for the same benefits to which a producer would be entitled under comparable additional coverage under subsection (c).
(9) Simplification
(A) Catastrophic risk protection plans
In developing and carrying out the policies and procedures for a catastrophic risk protection plan under this subchapter, the Corporation shall, to the maximum extent practicable, minimize the paperwork required and the complexity and costs of procedures governing applications for, processing, and servicing of the plan for all parties involved.
(B) Other plans
To the extent that the policies and procedures developed under subparagraph (A) may be applied to other plans of insurance offered under this subchapter without jeopardizing the actuarial soundness or integrity of the crop insurance program, the Corporation shall apply the policies and procedures to the other plans of insurance within a reasonable period of time (as determined by the Corporation) after the effective date of this paragraph.
(10) Loss adjustment
The rate for reimbursing an approved insurance provider or agent for expenses incurred by the approved insurance provider or agent for loss adjustment in connection with a policy of catastrophic risk protection shall not exceed 6 percent of the premium for catastrophic risk protection that is used to define loss ratio.
(c) General coverage levels
(1) Additional coverage generally
(A) In general
The Corporation shall offer to producers of agricultural commodities grown in the United States plans of crop insurance that provide additional coverage.
(B) Purchase
To be eligible for additional coverage, a producer must apply to an approved insurance provider for purchase of additional coverage if the coverage is available from an approved insurance provider. If additional coverage is unavailable privately, the Corporation may offer additional coverage plans of insurance directly to producers.
(2) Transfer of relevant information
If a producer has already applied for catastrophic risk protection at the local office of the Department and elects to purchase additional coverage, the relevant information for the crop of the producer shall be transferred to the approved insurance provider servicing the additional coverage crop policy.
(3) Yield and loss basis options
A producer shall have the option of purchasing additional coverage based on—
(A)(i) an individual yield and loss basis; or
(ii) an area yield and loss basis;
(B) an individual yield and loss basis, supplemented with coverage based on an area yield and loss basis to cover a part of the deductible under the individual yield and loss policy, as described in paragraph (4)(C); or
(C) a margin basis alone or in combination with the coverages available under subparagraph (A) or (B).
(4) Level of coverage
(A) Dollar denomination and percentage of yield
Except as provided in subparagraph (C), the level of coverage—
(i) shall be dollar denominated; and
(ii) may be purchased at any level not to exceed 85 percent of the individual yield or 95 percent of the area yield (as determined by the Corporation).
(B) Information
The Corporation shall provide producers with information on catastrophic risk and additional coverage in terms of dollar coverage (within the allowable limits of coverage provided in this paragraph).
(C) Supplemental coverage option
(i) In general
Notwithstanding subparagraph (A), in the case of the supplemental coverage option described in paragraph (3)(B), the Corporation shall offer producers the opportunity to purchase coverage in combination with a policy or plan of insurance offered under this subchapter that would allow indemnities to be paid to a producer equal to a part of the deductible under the policy or plan of insurance—
(I) at a county-wide level to the fullest extent practicable; or
(II) in counties that lack sufficient data, on the basis of such larger geographical area as the Corporation determines to provide sufficient data for purposes of providing the coverage.
(ii) Trigger
Coverage offered under paragraph (3)(B) and clause (i) shall be triggered only if the losses in the area exceed 14 percent of normal levels (as determined by the Corporation).
(iii) Coverage
Subject to the trigger described in clause (ii), coverage offered under paragraph (3)(B) and clause (i) shall not exceed the difference between—
(I) 86 percent; and
(II) the coverage level selected by the producer for the underlying policy or plan of insurance.
(iv) Ineligible crops and acres
Crops for which the producer has elected under
(v) Calculation of premium
Notwithstanding subsection (d), the premium for coverage offered under paragraph (3)(B) and clause (i) shall—
(I) be sufficient to cover anticipated losses and a reasonable reserve; and
(II) include an amount for operating and administrative expenses established in accordance with subsection (k)(4)(F).
(5) Expected market price
(A) Establishment or approval
For the purposes of this subchapter, the Corporation shall establish or approve the price level (referred to in this subchapter as the "expected market price") of each agricultural commodity for which insurance is offered.
(B) General rule
Except as otherwise provided in subparagraph (C), the expected market price of an agricultural commodity shall be not less than the projected market price of the agricultural commodity, as determined by the Corporation.
(C) Other authorized approaches
The expected market price of an agricultural commodity—
(i) may be based on the actual market price of the agricultural commodity at the time of harvest, as determined by the Corporation;
(ii) in the case of revenue and other similar plans of insurance, may be the actual market price of the agricultural commodity, as determined by the Corporation;
(iii) in the case of cost of production or similar plans of insurance, shall be the projected cost of producing the agricultural commodity, as determined by the Corporation; or
(iv) in the case of other plans of insurance, may be an appropriate amount, as determined by the Corporation.
(D) Grain sorghum price election
(i) In general
The Corporation, in conjunction with the Secretary (referred to in this subparagraph as the "Corporation"), shall—
(I) not later than 60 days after the date of enactment of this subparagraph, make available all methods and data, including data from the Economic Research Service, used by the Corporation to develop the expected market prices for grain sorghum under the production and revenue-based plans of insurance of the Corporation; and
(II) request applicable data from the grain sorghum industry.
(ii) Expert reviewers
(I) In general
Not later than 120 days after the date of enactment of this subparagraph, the Corporation shall contract individually with 5 expert reviewers described in subclause (II) to develop and recommend a methodology for determining an expected market price for sorghum for both the production and revenue-based plans of insurance to more accurately reflect the actual price at harvest.
(II) Requirements
The expert reviewers under subclause (I) shall be comprised of agricultural economists with experience in grain sorghum and corn markets, of whom—
(aa) 2 shall be agricultural economists of institutions of higher education;
(bb) 2 shall be economists from within the Department; and
(cc) 1 shall be an economist nominated by the grain sorghum industry.
(iii) Recommendations
(I) In general
Not later than 90 days after the date of contracting with the expert reviewers under clause (ii), the expert reviewers shall submit, and the Corporation shall make available to the public, the recommendations of the expert reviewers.
(II) Consideration
The Corporation shall consider the recommendations under subclause (I) when determining the appropriate pricing methodology to determine the expected market price for grain sorghum under both the production and revenue-based plans of insurance.
(III) Publication
Not later than 60 days after the date on which the Corporation receives the recommendations of the expert reviewers, the Corporation shall publish the proposed pricing methodology for both the production and revenue-based plans of insurance for notice and comment and, during the comment period, conduct at least 1 public meeting to discuss the proposed pricing methodologies.
(iv) Appropriate pricing methodology
(I) In general
Not later than 180 days after the close of the comment period in clause (iii)(III), but effective not later than the 2010 crop year, the Corporation shall implement a pricing methodology for grain sorghum under the production and revenue-based plans of insurance that is transparent and replicable.
(II) Interim methodology
Until the date on which the new pricing methodology is implemented, the Corporation may continue to use the pricing methodology that the Corporation determines best establishes the expected market price.
(III) Availability
On an annual basis, the Corporation shall make available the pricing methodology and data used to determine the expected market prices for grain sorghum under the production and revenue-based plans of insurance, including any changes to the methodology used to determine the expected market prices for grain sorghum from the previous year.
(6) Price elections
(A) In general
Subject to subparagraph (B), insurance coverage shall be made available to a producer on the basis of any price election that equals or is less than the price election established by the Corporation. The coverage shall be quoted in terms of dollars per acre.
(B) Minimum price elections
The Corporation may establish minimum price elections below which levels of insurance shall not be offered.
(C) Wheat classes and malting barley
The Corporation shall, as the Corporation determines practicable, offer producers different price elections for classes of wheat and malting barley (including contract prices in the case of malting barley), in addition to the standard price election, that reflect different market prices, as determined by the Corporation. The Corporation shall, as the Corporation determines practicable, offer additional coverage for each class determined under this subparagraph and charge a premium for each class that is actuarially sound.
(D) Organic crops
(i) In general
As soon as possible, but not later than the 2015 reinsurance year, the Corporation shall offer producers of organic crops price elections for all organic crops produced in compliance with standards issued by the Department of Agriculture under the national organic program established under the Organic Foods Production Act of 1990 (
(ii) Annual report
The Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate an annual report on progress made in developing and improving Federal crop insurance for organic crops, including—
(I) the numbers and varieties of organic crops insured;
(II) the progress of implementing the price elections required under this subparagraph, including the rate at which additional price elections are adopted for organic crops;
(III) the development of new insurance approaches relevant to organic producers; and
(IV) any recommendations the Corporation considers appropriate to improve Federal crop insurance coverage for organic crops.
(7) Fire and hail coverage
For levels of additional coverage equal to 65 percent or more of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, a producer may elect to delete from the additional coverage any coverage against damage caused by fire and hail if the producer obtains an equivalent or greater dollar amount of coverage for damage caused by fire and hail from an approved insurance provider. On written notice of the election to the company issuing the policy providing additional coverage and submission of evidence of substitute coverage on the commodity insured, the premium of the producer shall be reduced by an amount determined by the Corporation to be actuarially appropriate, taking into account the actuarial value of the remaining coverage provided by the Corporation. In no event shall the producer be given credit for an amount of premium determined to be greater than the actuarial value of the protection against losses caused by fire and hail that is included in the additional coverage for the crop.
(8) State premium subsidies
The Corporation may enter into an agreement with any State or agency of a State under which the State or agency may pay to the approved insurance provider an additional premium subsidy to further reduce the portion of the premium paid by producers in the State.
(9) Limitations on additional coverage
The Board may limit the availability of additional coverage under this subsection in any county or area, or on any farm, on the basis of the insurance risk involved. The Board shall not offer additional coverage equal to less than 50 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage.
(10) Administrative fee
(A) Fee required
If a producer elects to purchase coverage for a crop at a level in excess of catastrophic risk protection, the producer shall pay an administrative fee for the additional coverage of $30 per crop per county.
(B) Use of fees; waiver
Subparagraphs (D) and (E) of subsection (b)(5) shall apply with respect to the collection and use of administrative fees under this paragraph.
(C) Time for payment
Subsection (b)(5)(C) shall apply with respect to the collection date for the administrative fee.
(d) Premiums
(1) Premiums required
The Corporation shall fix adequate premiums for all the plans of insurance of the Corporation at such rates as the Board determines are actuarially sufficient to attain an expected loss ratio of not greater than—
(A) 1.1 through September 30, 1998;
(B) 1.075 for the period beginning October 1, 1998, and ending on the day before the date of enactment of the Food, Conservation, and Energy Act of 2008; and
(C) 1.0 on and after the date of enactment of that Act.
(2) Premium amounts
The premium amounts for catastrophic risk protection under subsection (b) and additional coverage under subsection (c) shall be fixed as follows:
(A) In the case of catastrophic risk protection, the amount of the premium established by the Corporation for each crop for which catastrophic risk protection is available shall be reduced by the percentage equal to the difference between the average loss ratio for the crop and 100 percent, plus a reasonable reserve, as determined by the Corporation.
(B) In the case of additional coverage equal to or greater than 50 percent of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount of the premium shall—
(i) be sufficient to cover anticipated losses and a reasonable reserve; and
(ii) include an amount for operating and administrative expenses, as determined by the Corporation, on an industry-wide basis as a percentage of the amount of the premium used to define loss ratio.
(3) Performance-based discount
The Corporation may provide a performance-based premium discount for a producer of an agricultural commodity who has good insurance or production experience relative to other producers of that agricultural commodity in the same area, as determined by the Corporation.
(4) Billing date for premiums
Effective beginning with the 2012 reinsurance year, the Corporation shall establish August 15 as the billing date for premiums.
(e) Payment of portion of premium by Corporation
(1) In general
For the purpose of encouraging the broadest possible participation of producers in the catastrophic risk protection provided under subsection (b) and the additional coverage provided under subsection (c), the Corporation shall pay a part of the premium in the amounts provided in accordance with this subsection.
(2) Amount of payment
Subject to paragraphs (3), (6), and (7), the amount of the premium to be paid by the Corporation shall be as follows:
(A) In the case of catastrophic risk protection, the amount shall be equivalent to the premium established for catastrophic risk protection under subsection (d)(2)(A).
(B) In the case of additional coverage equal to or greater than 50 percent, but less than 55 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—
(i) 67 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(C) In the case of additional coverage equal to or greater than 55 percent, but less than 65 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—
(i) 64 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(D) In the case of additional coverage equal to or greater than 65 percent, but less than 75 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—
(i) 59 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(E) In the case of additional coverage equal to or greater than 75 percent, but less than 80 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—
(i) 55 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(F) In the case of additional coverage equal to or greater than 80 percent, but less than 85 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—
(i) 48 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(G) Subject to subsection (c)(4), in the case of additional coverage equal to or greater than 85 percent of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—
(i) 38 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(H) In the case of the supplemental coverage option authorized in subsection (c)(4)(C), the amount shall be equal to the sum of—
(i) 65 percent of the additional premium associated with the coverage; and
(ii) the amount determined under subsection (c)(4)(C)(v)(II), subject to subsection (k)(4)(F), for the coverage to cover operating and administrative expenses.
(3) Prohibition on continuous coverage
Notwithstanding paragraph (2), during each of the 2001 and subsequent reinsurance years, additional coverage under subsection (c) shall be available only in 5 percent increments beginning at 50 percent of the recorded or appraised average yield.
(4) Premium payment disclosure
Each policy or plan of insurance under this subchapter shall prominently indicate the dollar amount of the portion of the premium paid by the Corporation.
(5) Enterprise and whole farm units
(A) In general
The Corporation may pay a portion of the premiums for plans or policies of insurance for which the insurable unit is defined on a whole farm or enterprise unit basis that is higher than would otherwise be paid in accordance with paragraph (2).
(B) Amount
The percentage of the premium paid by the Corporation to a policyholder for a policy with an enterprise or whole farm unit under this paragraph shall, to the maximum extent practicable, provide the same dollar amount of premium subsidy per acre that would otherwise have been paid by the Corporation under paragraph (2) if the policyholder had purchased a basic or optional unit for the crop for the crop year.
(C) Limitation
The amount of the premium paid by the Corporation under this paragraph may not exceed 80 percent of the total premium for the enterprise or whole farm unit policy.
(D) Nonirrigated crops
Beginning with the 2015 crop year, the Corporation shall make available separate enterprise units for irrigated and nonirrigated acreage of crops in counties.
(E) Enterprise units across county lines
The Corporation may allow a producer to establish a single enterprise unit by combining an enterprise unit with—
(i) 1 or more other enterprise units in 1 or more other counties; or
(ii) all basic units and all optional units in 1 or more other counties.
(6) Premium subsidy for area revenue plans
Subject to paragraph (4), in the case of a policy or plan of insurance that covers losses due to a reduction in revenue in an area, the amount of the premium paid by the Corporation shall be as follows:
(A) In the case of additional area coverage equal to or greater than 70 percent, but less than 75 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of—
(i) 59 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(B) In the case of additional area coverage equal to or greater than 75 percent, but less than 85 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of—
(i) 55 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(C) In the case of additional area coverage equal to or greater than 85 percent, but less than 90 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of—
(i) 49 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(D) In the case of additional area coverage equal to or greater than 90 percent of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of—
(i) 44 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(7) Premium subsidy for area yield plans
Subject to paragraph (4), in the case of a policy or plan of insurance that covers losses due to a loss of yield or prevented planting in an area, the amount of the premium paid by the Corporation shall be as follows:
(A) In the case of additional area coverage equal to or greater than 70 percent, but less than 80 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of—
(i) 59 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(B) In the case of additional area coverage equal to or greater than 80 percent, but less than 90 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of—
(i) 55 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(C) In the case of additional area coverage equal to or greater than 90 percent,1 of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of—
(i) 51 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(8) Premium for beginning and veteran farmers or ranchers
Notwithstanding any other provision of this subsection regarding payment of a portion of premiums, a beginning farmer or rancher or veteran farmer or rancher shall receive premium assistance that is 10 percentage points greater than premium assistance that would otherwise be available under paragraphs (2) (except for subparagraph (A) of that paragraph), (5), (6), and (7) for the applicable policy, plan of insurance, and coverage level selected by the beginning farmer or rancher or veteran farmer or rancher.
(f) Eligibility
(1) In general
To participate in catastrophic risk protection coverage under this section, a producer shall submit an application at the local office of the Department or to an approved insurance provider.
(2) Sales closing date
(A) In general
For coverage under this subchapter, each producer shall purchase crop insurance on or before the sales closing date for the crop by providing the required information and executing the required documents. Subject to the goal of ensuring actuarial soundness for the crop insurance program, the sales closing date shall be established by the Corporation to maximize convenience to producers in obtaining benefits under price and production adjustment programs of the Department.
(B) Established dates
Except as provided in subparagraph (C), the Corporation shall establish, for an insurance policy for each insurable crop that is planted in the spring, a sales closing date that is 30 days earlier than the corresponding sales closing date that was established for the 1994 crop year.
(C) Exception
If compliance with subparagraph (B) results in a sales closing date for an agricultural commodity that is earlier than January 31, the sales closing date for that commodity shall be January 31 beginning with the 2000 crop year.
(3) Records and reporting
To obtain catastrophic risk protection under subsection (b) or additional coverage under subsection (c), a producer shall—
(A) provide annually records acceptable to the Secretary regarding crop acreage, acreage yields, and production for each agricultural commodity insured under this subchapter or accept a yield determined by the Corporation; and
(B) report acreage planted and prevented from planting by the designated acreage reporting date for the crop and location as established by the Corporation.
(g) Yield determinations
(1) In general
Subject to paragraph (2), the Corporation shall establish crop insurance underwriting rules that ensure that yield coverage, as specified in this subsection, is provided to eligible producers obtaining catastrophic risk protection under subsection (b) or additional coverage under subsection (c).
(2) Yield coverage plans
(A) Actual production history
Subject to subparagraph (B) and paragraph (4)(C), the yield for a crop shall be based on the actual production history for the crop, if the crop was produced on the farm without penalty during each of the 4 crop years immediately preceding the crop year for which actual production history is being established, building up to a production data base for each of the 10 consecutive crop years preceding the crop year for which actual production history is being established.
(B) Assigned yield
If the producer does not provide satisfactory evidence of the yield of a commodity under subparagraph (A), the producer shall be assigned—
(i) a yield that is not less than 65 percent of the transitional yield of the producer (adjusted to reflect actual production reflected in the records acceptable to the Corporation for continuous years), as specified in regulations issued by the Corporation based on production history requirements;
(ii) a yield determined by the Corporation, in the case of—
(I) a producer that has not had a share of the production of the insured crop for more than two crop years, as determined by the Secretary;
(II) a producer that produces an agricultural commodity on land that has not been farmed by the producer; or
(III) a producer that rotates a crop produced on a farm to a crop that has not been produced on the farm; or
(iii) if the producer is a beginning farmer or rancher or veteran farmer or rancher who was previously involved in a farming or ranching operation, including involvement in the decisionmaking or physical involvement in the production of the crop or livestock on the farm, for any acreage obtained by the beginning farmer or rancher or veteran farmer or rancher, a yield that is the higher of—
(I) the actual production history of the previous producer of the crop or livestock on the acreage determined under subparagraph (A); or
(II) a yield of the producer, as determined in clause (i).
(C) Area yield
The Corporation may offer a crop insurance plan based on an area yield that allows an insured producer to qualify for an indemnity if a loss has occurred in an area (as specified by the Corporation) in which the farm of the producer is located. Under an area yield plan, an insured producer shall be allowed to select the level of area production at which an indemnity will be paid consistent with such terms and conditions as are established by the Corporation.
(D) Commodity-by-commodity basis
A producer may choose between individual yield or area yield coverage or combined coverage, if available, on a commodity-by-commodity basis.
(E) Sources of yield data
To determine yields under this paragraph, the Corporation—
(i) shall use county data collected by the Risk Management Agency, the National Agricultural Statistics Service, or both; or
(ii) if sufficient county data is not available, may use other data considered appropriate by the Secretary.
(3) Transitional yields for producers of feed or forage
(A) In general
If a producer does not provide satisfactory evidence of a yield under paragraph (2)(A), the producer shall be assigned a yield that is at least 80 percent of the transitional yield established by the Corporation (adjusted to reflect the actual production history of the producer) if the Secretary determines that—
(i) the producer grows feed or forage primarily for on-farm use in a livestock, dairy, or poultry operation; and
(ii) over 50 percent of the net farm income of the producer is derived from the operation.
(B) Yield calculation
The Corporation shall—
(i) for the first year of participation of a producer, provide the assigned yield under this paragraph to the producer of feed or forage; and
(ii) for the second year of participation of the producer, apply the actual production history or assigned yield requirement, as provided in this subsection.
(C) Termination of authority
The authority provided by this paragraph shall terminate on the date that is 3 years after the effective date of this paragraph.
(4) Adjustment in actual production history to establish insurable yields
(A) Application
This paragraph shall apply whenever the Corporation uses the actual production records of the producer to establish the producer's actual production history for an agricultural commodity for any of the 2001 and subsequent crop years.
(B) Election to use percentage of transitional yield
If, for one or more of the crop years used to establish the producer's actual production history of an agricultural commodity, the producer's recorded or appraised yield of the commodity was less than 60 percent of the applicable transitional yield, as determined by the Corporation, the Corporation shall, at the election of the producer—
(i) exclude any of such recorded or appraised yield; and
(ii)(I) replace each excluded yield with a yield equal to 60 percent of the applicable transitional yield; or
(II) in the case of beginning farmers or ranchers and veteran farmers or ranchers, replace each excluded yield with a yield equal to 80 percent of the applicable transitional yield.
(C) Election to exclude certain history
(i) In general
Notwithstanding paragraph (2), with respect to 1 or more of the crop years used to establish the actual production history of an agricultural commodity of the producer, the producer may elect to exclude any recorded or appraised yield for any crop year in which the per planted acre yield of the agricultural commodity in the county of the producer was at least 50 percent below the simple average of the per planted acre yield of the agricultural commodity in the county during the previous 10 consecutive crop years.
(ii) Contiguous counties
In any crop year that a producer in a county is eligible to make an election to exclude a yield under clause (i), a producer in a contiguous county is eligible to make such an election.
(iii) Irrigation practice
For purposes of determining whether the per planted acre yield of the agricultural commodity in the county of the producer was at least 50 percent below the simple average of the per planted acre yield of the agricultural commodity in the county during the previous 10 consecutive crop years, the Corporation shall make a separate determination for irrigated and nonirrigated acreage.
(D) Premium adjustment
In the case of a producer that makes an election under subparagraph (B) or (C), the Corporation shall adjust the premium to reflect the risk associated with the adjustment made in the actual production history of the producer.
(5) Adjustment to reflect increased yields from successful pest control efforts
(A) Situations justifying adjustment
The Corporation shall develop a methodology for adjusting the actual production history of a producer when each of the following apply:
(i) The producer's farm is located in an area where systematic, area-wide efforts have been undertaken using certain operations or measures, or the producer's farm is a location at which certain operations or measures have been undertaken, to detect, eradicate, suppress, or control, or at least to prevent or retard the spread of, a plant disease or plant pest, including a plant pest (as defined in section 7759 2 of this title).
(ii) The presence of the plant disease or plant pest has been found to adversely affect the yield of the agricultural commodity for which the producer is applying for insurance.
(iii) The efforts described in clause (i) have been effective.
(B) Adjustment amount
The amount by which the Corporation adjusts the actual production history of a producer of an agricultural commodity shall reflect the degree to which the success of the systematic, area-wide efforts described in subparagraph (A), on average, increases the yield of the commodity on the producer's farm, as determined by the Corporation.
(6) Continued authority
(A) In general
The Corporation shall establish—
(i) underwriting rules that limit the decrease in the actual production history of a producer, at the election of the producer, to not more than 10 percent of the actual production history of the previous crop year provided that the production decline was the result of drought, flood, natural disaster, or other insurable loss (as determined by the Corporation); and
(ii) actuarially sound premiums to cover additional risk.
(B) Other authority
The authority provided under subparagraph (A) is in addition to any other authority that adjusts the actual production history of the producer under this subchapter.
(C) Effect
Nothing in this paragraph shall be construed to require a change in the administration of any provision of this subchapter as the subchapter was administered for the 2018 reinsurance year.
(h) Submission of policies and materials to Board
(1) Authority to submit
(A) In general
In addition to any standard forms or policies that the Board may require be made available to producers under subsection (c), a person (including an approved insurance provider, a college or university, a cooperative or trade association, or any other person) may prepare for submission or propose to the Board—
(i) other crop insurance policies and provisions of policies; and
(ii) rates of premiums for multiple peril crop insurance pertaining to wheat, soybeans, field corn, and any other crops determined by the Secretary.
(B) Review and submission by Corporation
(i) In general
The Corporation shall review any policy developed under
(I) subject to clause (ii), will likely result in a viable and marketable policy consistent with this subsection;
(II) would provide crop insurance coverage in a significantly improved form; and
(III) adequately protects the interests of producers.
(ii) Waiver for hemp
The Corporation may waive the viability and marketability requirement under clause (i)(I) in the case of a policy or pilot program relating to the production of hemp.
(2) Submission of policies
A policy or other material submitted to the Board under this subsection may be prepared without regard to the limitations contained in this subchapter, including the requirements concerning the levels of coverage and rates and the requirement that a price level for each commodity insured must equal the expected market price for the commodity as established by the Board.
(3) Review and approval by the Board
(A) In general
A policy, plan of insurance, or other material submitted to the Board under this subsection shall be reviewed by the Board and shall be approved by the Board for reinsurance and for sale by approved insurance providers to producers at actuarially appropriate rates and under appropriate terms and conditions if the Board determines that—
(i) the interests of producers are adequately protected;
(ii) the proposed policy or plan of insurance will—
(I) provide a new kind of coverage that is likely to be viable and marketable;
(II) provide crop insurance coverage in a manner that addresses a clear and identifiable flaw or problem in an existing policy; or
(III) provide a new kind of coverage for a commodity that previously had no available crop insurance, or has demonstrated a low level of participation or coverage level under existing coverage; and
(iii) the proposed policy or plan of insurance will not have a significant adverse impact on the crop insurance delivery system.
(B) Consideration
In approving policies or plans of insurance, the Board shall in a timely manner—
(i) first, consider policies or plans of insurance that address underserved commodities, including commodities for which there is no insurance;
(ii) second, consider existing policies or plans of insurance for which there is inadequate coverage or there exists low levels of participation; and
(iii) last, consider all policies or plans of insurance submitted to the Board that do not meet the criteria described in clause (i) or (ii).
(C) Specified review and approval priorities
In reviewing policies and other materials submitted to the Board under this subsection for approval, the Board—
(i) shall make the development and approval of a revenue policy for peanut producers a priority so that a revenue policy is available to peanut producers in time for the 2015 crop year;
(ii) shall make the development and approval of a margin coverage policy for rice producers a priority so that a margin coverage policy is available to rice producers in time for the 2015 crop year;
(iii) may approve a submission that is made pursuant to this subsection that would, beginning with the 2015 crop year, allow producers that purchase policies in accordance with subsection (e)(5)(A) to separate enterprise units by risk rating for acreage of crops in counties; and
(iv) in the case of reviewing policies and other materials relating to the production of hemp, may waive the viability and marketability requirement under subparagraph (A)(ii)(I).
(4) Guidelines for submission and review
The Corporation shall issue regulations to establish guidelines for the submission, and Board review, of policies or other material submitted to the Board under this subsection. At a minimum, the guidelines shall ensure the following:
(A) Confidentiality
(i) In general
A proposal submitted to the Board under this subsection (including any information generated from the proposal) shall be considered to be confidential commercial or financial information for the purposes of
(ii) Standard of confidentiality
If information concerning a proposal could be withheld by the Secretary under the standard for privileged or confidential information pertaining to trade secrets and commercial or financial information under
(iii) Application
This subparagraph shall apply with respect to a proposal only during the period preceding any approval of the proposal by the Board.
(B) Personal presentation
The Board shall provide an applicant with the opportunity to present the proposal to the Board in person if the applicant so desires.
(C) Notification of intent to disapprove
(i) Time period
The Board shall provide an applicant with notification of intent to disapprove a proposal not later than 30 days prior to making the disapproval.
(ii) Modification of application
(I) Authority
An applicant that receives the notification may modify the application, and such application, as modified, shall be considered by the Board in the manner provided in subparagraph (D) within the 30-day period beginning on the date the modified application is submitted.
(II) Time period
Clause (i) shall not apply to the Board's consideration of the modified application.
(iii) Explanation
Any notification of intent to disapprove a policy or other material submitted under this subsection shall be accompanied by a complete explanation as to the reasons for the Board's intention to deny approval.
(D) Determination to approve or disapprove policies or materials
(i) Time period
Not later than 120 days after a policy or other material is submitted under this subsection, the Board shall make a determination to approve or disapprove the policy or material.
(ii) Explanation
Any determination by the Board to disapprove any policy or other material shall be accompanied by a complete explanation of the reasons for the Board's decision to deny approval.
(iii) Failure to meet deadline
Notwithstanding any other provision of this subchapter, if the Board fails to make a determination within the prescribed time period, the submitted policy or other material shall be deemed approved by the Board for the initial reinsurance year designated for the policy or material, unless the Board and the applicant agree to an extension.
(E) Consultation
(i) Requirement
As part of the feasibility and research associated with the development of a policy or other material for fruits and vegetables, tree nuts, dried fruits, and horticulture and nursery crops (including floriculture), the submitter prior to making a submission under this subsection shall consult with groups representing producers of those agricultural commodities in all major producing areas for the commodities to be served or potentially impacted, either directly or indirectly.
(ii) Submission to the Board
Any submission made to the Board under this subsection shall contain a summary and analysis of the feasibility and research findings from the impacted groups described in clause (i), including a summary assessment of the support for or against development of the policy and an assessment on the impact of the proposed policy to the general marketing and production of the crop from both a regional and national perspective.
(iii) Evaluation by the Board
In evaluating whether the interests of producers are adequately protected pursuant to paragraph (3) with respect to a submission made under this subsection, the Board shall review the information provided pursuant to clause (ii) to determine if the submission will create adverse market distortions with respect to the production of commodities that are the subject of the submission.
(5) Premium schedule
(A) Payment by Corporation
In the case of a policy or plan of insurance developed and approved under this subsection or
(i) the percentage, specified in subsection (e) for a similar level of coverage, of the total amount of the premium used to define loss ratio; and
(ii) an amount for administrative and operating expenses determined in accordance with subsection (k)(4).
(B) Transitional schedule
Effective only during the 2001 reinsurance year, in the case of a policy or plan of insurance developed and approved under this subsection or
(6) Additional prevented planting policy coverage
(A) In general
Beginning with the 1995 crop year, the Corporation shall offer to producers additional prevented planting coverage that insures producers against losses in accordance with this paragraph.
(B) Approved insurance providers
Additional prevented planting coverage shall be offered by the Corporation through approved insurance providers.
(C) Timing of loss
A crop loss shall be covered by the additional prevented planting coverage if—
(i) crop insurance policies were obtained for—
(I) the crop year the loss was experienced; and
(II) the crop year immediately preceding the year of the prevented planting loss; and
(ii) the cause of the loss occurred—
(I) after the sales closing date for the crop in the crop year immediately preceding the loss; and
(II) before the sales closing date for the crop in the year in which the loss is experienced.
(i) Adoption of rates and coverages
(1) In general
The Corporation shall adopt, as soon as practicable, rates and coverages that will improve the actuarial soundness of the insurance operations of the Corporation for those crops that are determined to be insured at rates that are not actuarially sound, except that no rate may be increased by an amount of more than 20 percent over the comparable rate of the preceding crop year.
(2) Review of rating methodologies
To maximize participation in the Federal crop insurance program and to ensure equity for producers, the Corporation shall periodically review the methodologies employed for rating plans of insurance under this subchapter consistent with
(3) Analysis of rating and loss history
The Corporation shall analyze the rating and loss history of approved policies and plans of insurance for agricultural commodities by area.
(4) Premium adjustment
If the Corporation makes a determination that premium rates are excessive for an agricultural commodity in an area relative to the requirements of subsection (d)(2) for that area, then, for the 2002 crop year (and as necessary thereafter), the Corporation shall make appropriate adjustments in the premium rates for that area for that agricultural commodity.
(j) Claims for losses
(1) In general
Under rules prescribed by the Corporation, the Corporation may provide for adjustment and payment of claims for losses. The rules prescribed by the Corporation shall establish standards to ensure that all claims for losses are adjusted, to the extent practicable, in a uniform and timely manner.
(2) Denial of claims
(A) In general
Subject to subparagraph (B), if a claim for indemnity is denied by the Corporation or an approved provider on behalf of the Corporation, an action on the claim may be brought against the Corporation or Secretary only in the United States district court for the district in which the insured farm is located.
(B) Statute of limitations
A suit on the claim may be brought not later than 1 year after the date on which final notice of denial of the claim is provided to the claimant.
(3) Indemnification
The Corporation shall provide approved insurance providers with indemnification, including costs and reasonable attorney fees incurred by the approved insurance provider, due to errors or omissions on the part of the Corporation.
(4) Marketing windows
The Corporation shall consider marketing windows in determining whether it is feasible to require planting during a crop year.
(5) Settlement of claims on farm-stored production
A producer with farm-stored production may, at the option of the producer, delay settlement of a crop insurance claim relating to the farm-stored production for up to 4 months after the last date on which claims may be submitted under the policy of insurance.
(k) Reinsurance
(1) In general
Notwithstanding any other provision of this subchapter, the Corporation shall, to the maximum extent practicable, provide reinsurance to insurers approved by the Corporation that insure producers of any agricultural commodity under 1 or more plans acceptable to the Corporation.
(2) Terms and conditions
The reinsurance shall be provided on such terms and conditions as the Board may determine to be consistent with subsections (b) and (c) and sound reinsurance principles.
(3) Share of risk
The reinsurance agreements of the Corporation with the reinsured companies shall require the reinsured companies to bear a sufficient share of any potential loss under the agreement so as to ensure that the reinsured company will sell and service policies of insurance in a sound and prudent manner, taking into consideration the financial condition of the reinsured companies and the availability of private reinsurance.
(4) Rate
(A) In general
Except as otherwise provided in this paragraph, the rate established by the Board to reimburse approved insurance providers and agents for the administrative and operating costs of the providers and agents shall not exceed—
(i) for the 1998 reinsurance year, 27 percent of the premium used to define loss ratio; and
(ii) for each of the 1999 and subsequent reinsurance years, 24.5 percent of the premium used to define loss ratio.
(B) Proportional reductions
A policy of additional coverage that received a rate of reimbursement for administrative and operating costs for the 1998 reinsurance year that is lower than the rate specified in subparagraph (A)(i) shall receive a reduction in the rate of reimbursement that is proportional to the reduction in the rate of reimbursement between clauses (i) and (ii) of subparagraph (A).
(C) Other reductions
Beginning with the 2002 reinsurance year, in the case of a policy or plan of insurance approved by the Board that was not reinsured during the 1998 reinsurance year but, had it been reinsured, would have received a reduced rate of reimbursement during the 1998 reinsurance year, the rate of reimbursement for administrative and operating costs established for the policy or plan of insurance shall take into account the factors used to determine the rate of reimbursement for administrative and operating costs during the 1998 reinsurance year, including the expected difference in premium and actual administrative and operating costs of the policy or plan of insurance relative to an individual yield policy or plan of insurance and other appropriate factors, as determined by the Corporation.
(D) Time for reimbursement
Effective beginning with the 2012 reinsurance year, the Corporation shall reimburse approved insurance providers and agents for the allowable administrative and operating costs of the providers and agents as soon as practicable after October 1 (but not later than October 31) after the reinsurance year for which reimbursements are earned.
(E) Reimbursement rate reduction
In the case of a policy of additional coverage that received a rate of reimbursement for administrative and operating costs for the 2008 reinsurance year, for each of the 2009 and subsequent reinsurance years, the reimbursement rate for administrative and operating costs shall be 2.3 percentage points below the rates in effect as of the date of enactment of the Food, Conservation, and Energy Act of 2008 for all crop insurance policies used to define loss ratio, except that only ½ of the reduction shall apply in a reinsurance year to the total premium written in a State in which the State loss ratio is greater than 1.2.
(F) Reimbursement rate for area policies and plans of insurance
Notwithstanding subparagraphs (A) through (E), for each of the 2009 and subsequent reinsurance years, the reimbursement rate for area policies and plans of insurance widely available as of the date of enactment of this subparagraph or authorized under subsection (c)(4)(C) or
(5) Cost and regulatory reduction
Consistent with section 118 of the Federal Crop Insurance Reform Act of 1994, and consistent with maintenance of program integrity, prevention of fraud and abuse, the need for program expansion, and improvement of quality of service to customers, the Board shall alter program procedures and administrative requirements in order to reduce the administrative and operating costs of approved insurance providers and agents in an amount that corresponds to any reduction in the reimbursement rate required under paragraph (4) during the 5-year period beginning on October 13, 1994.
(6) Agency discretion
The determination of whether the Corporation is achieving, or has achieved, corresponding administrative cost savings shall not be subject to administrative review, and is wholly committed to agency discretion within the meaning of
(7) Plan
The Corporation shall submit to Congress a plan outlining the measures that will be used to achieve the reduction required under paragraph (5). If the Corporation can identify additional cost reduction measures, the Corporation shall describe the measures in the plan.
(8) Renegotiation of standard reinsurance agreement
(A) In general
Except as provided in subparagraph (B), notwithstanding section 536 of the Agricultural Research, Extension, and Education Reform Act of 1998 (
(i) to be effective for the 2011 reinsurance year beginning July 1, 2010; and
(ii) once during each period of 5 reinsurance years thereafter.
(B) Exceptions
(i) Adverse circumstances
Subject to clause (ii), subparagraph (A) shall not apply in any case in which the approved insurance providers, as a whole, experience unexpected adverse circumstances, as determined by the Secretary.
(ii) Effect of Federal law changes
If Federal law is enacted after the date of enactment of this paragraph that requires revisions in the financial terms of the Standard Reinsurance Agreement, and changes in the Agreement are made on a mandatory basis by the Corporation, the changes shall not be considered to be a renegotiation of the Agreement for purposes of subparagraph (A).
(C) Notification requirement
If the Corporation renegotiates a Standard Reinsurance Agreement under subparagraph (A)(ii), the Corporation shall notify the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate of the renegotiation.
(D) Consultation
The approved insurance providers may confer with each other and collectively with the Corporation during any renegotiation under subparagraph (A).
(E) 2011 reinsurance year
(i) In general
As part of the Standard Reinsurance Agreement renegotiation authorized under subparagraph (A)(i), the Corporation shall consider alternative methods to determine reimbursement rates for administrative and operating costs.
(ii) Alternative methods
Alternatives considered under clause (i) shall include—
(I) methods that—
(aa) are graduated and base reimbursement rates in a State on changes in premiums in that State;
(bb) are graduated and base reimbursement rates in a State on the loss ratio for crop insurance for that State; and
(cc) are graduated and base reimbursement rates on individual policies on the level of total premium for each policy; and
(II) any other method that takes into account current financial conditions of the program and ensures continued availability of the program to producers on a nationwide basis.
(F) Budget
(i) In general
The Board shall ensure that any Standard Reinsurance Agreement negotiated under subparagraph (A)(ii) shall—
(I) to the maximum extent practicable, be estimated as budget neutral with respect to the total amount of payments described in paragraph (9) as compared to the total amount of such payments estimated to be made under the immediately preceding Standard Reinsurance Agreement if that Agreement were extended over the same period of time;
(II) comply with the applicable provisions of this subchapter establishing the rates of reimbursement for administrative and operating costs for approved insurance providers and agents, except that, to the maximum extent practicable, the estimated total amount of reimbursement for those costs shall not be less than the total amount of the payments to be made under the immediately preceding Standard Reinsurance Agreement if that Agreement were extended over the same period of time, as estimated on February 7, 2014; and
(III) in no event significantly depart from budget neutrality unless otherwise required by this subchapter.
(ii) Use of savings
To the extent that any budget savings are realized in the renegotiation of a Standard Reinsurance Agreement under subparagraph (A)(ii), and the savings are determined not to be a significant departure from budget neutrality under clause (i), the savings shall be used to increase reimbursements or payments described under paragraphs (4) and (9).
(9) Due date for payment of underwriting gains
Effective beginning with the 2011 reinsurance year, the Corporation shall make payments for underwriting gains under this subchapter on—
(A) for the 2011 reinsurance year, October 1, 2012; and
(B) for each reinsurance year thereafter, October 1 of the following calendar year.
(l) Optional coverages
The Corporation may offer specific risk protection programs, including protection against prevented planting, wildlife depredation, tree damage and disease, and insect infestation, under such terms and conditions as the Board may determine, except that no program may be undertaken if insurance for the specific risk involved is generally available from private companies.
(m) Quality loss adjustment coverage
(1) Effect of coverage
If a policy or plan of insurance offered under this subchapter includes quality loss adjustment coverage, the coverage shall provide for a reduction in the quantity of production of the agricultural commodity considered produced during a crop year, or a similar adjustment, as a result of the agricultural commodity not meeting the quality standards established in the policy or plan of insurance.
(2) Additional quality loss adjustment
(A) Producer option
Notwithstanding any other provision of law, in addition to the quality loss adjustment coverage available under paragraph (1), the Corporation shall offer producers the option of purchasing quality loss adjustment coverage on a basis that is smaller than a unit with respect to an agricultural commodity that satisfies each of the following:
(i) The agricultural commodity is sold on an identity-preserved basis.
(ii) All quality determinations are made solely by the Federal agency designated to grade or classify the agricultural commodity.
(iii) All quality determinations are made in accordance with standards published by the Federal agency in the Federal Register.
(iv) The discount schedules that reflect the reduction in quality of the agricultural commodity are established by the Secretary.
(B) Basis for adjustment
Under this paragraph, the Corporation shall set the quality standards below which quality losses will be paid based on the variability of the grade of the agricultural commodity from the base quality for the agricultural commodity.
(3) Review of criteria and procedures
(A) Review
The Corporation shall contract with a qualified person to review the quality loss adjustment procedures of the Corporation so that the procedures more accurately reflect local quality discounts that are applied to agricultural commodities insured under this subchapter.
(B) Procedures
Effective beginning not later than the 2004 reinsurance year, based on the review, the Corporation shall make adjustments in the procedures, taking into consideration the actuarial soundness of the adjustment and the prevention of fraud, waste, and abuse.
(4) Quality of agricultural commodities delivered to warehouse operators
In administering this subchapter, the Secretary shall accept, in the same manner and under the same terms and conditions, evidence of the quality of agricultural commodities delivered to—
(A) warehouse operators that are licensed under the United States Warehouse Act (
(B) warehouse operators that—
(i) are licensed under State law; and
(ii) have entered into a storage agreement with the Commodity Credit Corporation; and
(C) warehouse operators that—
(i) are not licensed under State law but are in compliance with State law regarding warehouses; and
(ii) have entered into a commodity storage agreement with the Commodity Credit Corporation.
(5) Special provisions for malting barley
The Corporation shall promulgate special provisions under this subsection specific to malting barley, taking into consideration any changes in quality factors, as required by applicable market conditions.
(6) Test weight for corn
(A) In general
The Corporation shall establish procedures to allow insured producers not more than 120 days to settle claims, in accordance with procedures established by the Secretary, involving corn that is determined to have low test weight.
(B) Implementation
As soon as practicable after February 7, 2014, the Corporation shall implement subparagraph (A) on a regional basis based on market conditions and the interests of producers.
(C) Termination of effectiveness
The authority provided by this paragraph terminates effective on the date that is 5 years after the date on which subparagraph (A) is implemented.
(n) Limitation on multiple benefits for same loss
(1) In general
Except as provided in paragraph (2), if a producer who is eligible to receive benefits under catastrophic risk protection under subsection (b) is also eligible to receive assistance for the same loss under any other program administered by the Secretary, the producer shall be required to elect whether to receive benefits under this subchapter or under the other program, but not both. A producer who purchases additional coverage under subsection (c) may also receive assistance for the same loss under other programs administered by the Secretary, except that the amount received for the loss under the additional coverage together with the amount received under the other programs may not exceed the amount of the actual loss of the producer.
(2) Exception
Paragraph (1) shall not apply to emergency loans under subtitle C of the Consolidated Farm and Rural Development Act (
(o) Crop production on native sod
(1) Definition of native sod
In this subsection, the term "native sod" means land—
(A) on which the plant cover is composed principally of native grasses, grasslike plants, forbs, or shrubs suitable for grazing and browsing; and
(B) that has never been tilled, or the producer cannot substantiate that the ground has ever been tilled, for the production of an annual crop as of the date of enactment of this subsection.
(2) Reduction in benefits
(A) In general
(i) First 4 crop years
During the first 4 crop years of planting, as determined by the Secretary, native sod acreage that has been tilled for the production of an annual crop beginning on February 8, 2014, and ending on December 20, 2018, shall be subject to a reduction in benefits under this subchapter as described in this paragraph.
(ii) Subsequent crop years
Native sod acreage that has been tilled for the production of an insurable crop after December 20, 2018, shall be subject to a reduction in benefits under this subchapter as described in this paragraph for not more than 4 cumulative years—
(I) during the first 10 years after initial tillage; and
(II) during each of which a crop on that acreage is insured under subsection (c).
(B) De minimis acreage exemption
The Secretary shall exempt areas of 5 acres or less from subparagraph (A).
(C) Administration
(i) Reduction
For purposes of the reduction in benefits for the acreage described in subparagraph (A)—
(I) the crop insurance guarantee shall be determined by using a yield equal to 65 percent of the transitional yield of the producer; and
(II) the crop insurance premium subsidy provided for the producer under this subchapter, except for coverage authorized pursuant to subsection (b)(1), shall be 50 percentage points less than the premium subsidy that would otherwise apply.
(ii) Yield substitution
During the period native sod acreage is covered by this subsection, a producer may not substitute yields for the native sod.
(3) Application
This subsection shall only apply to native sod acreage in the States of Minnesota, Iowa, North Dakota, South Dakota, Montana, and Nebraska.
(p) Coverage levels by practice
Beginning with the 2015 crop year, a producer that produces an agricultural commodity on both dry land and irrigated land may elect a different coverage level for each production practice.
(Feb. 16, 1938, ch. 30, title V, §508,
Editorial Notes
References in Text
The Department of Agriculture Reorganization Act of 1994, referred to in subsec. (a)(3)(B)(ii)(I), is title II of
The date of enactment of the Food, Conservation, and Energy Act of 2008, the date of enactment of this subsection, the date of enactment of this paragraph, and the date of enactment of this subparagraph, referred to in subsecs. (a)(9)(B)(iii)(I), (c)(5)(D)(i)(I), (ii)(I), (d)(1)(B), (C), (k)(4)(E), (F), (8)(B)(ii), and (o)(1)(B), mean the date of enactment of
For the effective date of this paragraph, referred to in subsecs. (b)(9)(B) and (g)(3)(C), as being Oct. 13, 1994, see Effective Date of 1994 Amendment note below.
The Organic Foods Production Act of 1990, referred to in subsec. (c)(6)(D)(i), is title XXI of
Section 118 of the Federal Crop Insurance Reform Act of 1994, referred to in subsec. (k)(5), is section 118 of
This subchapter, referred to in subsecs. (g)(6)(B), (C) and (k)(8)(F)(i)(II), (III), was in the original "this Act", meaning the Federal Crop Insurance Act, which is subtitle A of title V of act Feb. 16, 1938, ch. 30.
The United States Warehouse Act, referred to in subsec. (m)(4)(A), is part C of act Aug. 11, 1916, ch. 313,
The Consolidated Farm and Rural Development Act, referred to in subsec. (n)(2), is title III of
Codification
Amendments
2018—Subsec. (a)(2).
Subsec. (a)(3)(B).
Subsec. (a)(6).
Subsec. (a)(6)(A).
Subsec. (a)(6)(B).
Subsec. (a)(6)(C), (D).
"(C)
"(D)
Subsec. (a)(7).
Subsec. (a)(7)(A).
Subsec. (a)(7)(A)(i).
Subsec. (a)(7)(B).
Subsec. (a)(7)(C).
"(i)
"(ii)
Subsec. (a)(11).
Subsec. (b)(1).
Subsec. (b)(5)(A).
Subsec. (b)(5)(E).
Subsec. (e)(5)(E).
Subsec. (e)(8).
Subsec. (g)(2)(B)(iii).
Subsec. (g)(4)(B)(ii)(II).
Subsec. (g)(6).
Subsec. (h)(1)(B).
Subsec. (h)(3)(C)(iv).
Subsec. (o)(2)(A).
2015—Subsec. (k)(8).
Subsec. (k)(8)(A).
"(i) not later than December 31, 2016; and
"(ii) not less than once during each period of 5 reinsurance years thereafter."
for "may renegotiate the financial terms and conditions of each Standard Reinsurance Agreement—
"(i) to be effective for the 2011 reinsurance year beginning July 1, 2010; and
"(ii) once during each period of 5 reinsurance years thereafter.",
was repealed by
Subsec. (k)(8)(E).
2014—Subsec. (a)(9)(C).
Subsec. (b)(1).
Subsec. (b)(5)(E).
Subsec. (b)(7) to (11).
Subsec. (c)(3).
Subsec. (c)(3)(C).
Subsec. (c)(4).
Subsec. (c)(6)(D).
Subsec. (d)(2)(A).
Subsec. (e)(2).
Subsec. (e)(2)(H).
Subsec. (e)(5)(A).
Subsec. (e)(5)(D).
Subsec. (e)(8).
Subsec. (g)(2)(A).
Subsec. (g)(2)(B)(iii).
Subsec. (g)(2)(E).
Subsec. (g)(4)(B)(ii).
Subsec. (g)(4)(C), (D).
Subsec. (h)(1).
Subsec. (h)(3).
Subsec. (h)(4)(E).
Subsec. (k)(4)(F).
Subsec. (k)(8)(C).
Subsec. (k)(8)(F).
Subsec. (m)(6).
Subsec. (o)(1)(B).
Subsec. (o)(2).
Subsec. (o)(2)(A).
"(i) this subchapter; and
"(ii)
Subsec. (o)(2)(C).
Subsec. (o)(3).
Subsec. (p).
2008—Subsec. (a).
Subsec. (a)(9), (10).
Subsec. (b)(5)(A).
Subsec. (b)(5)(B).
Subsec. (b)(5)(B)(i).
Subsec. (b)(5)(B)(ii).
Subsec. (b)(5)(B)(iii) to (v).
Subsec. (b)(5)(B)(vi).
"(I) the operation of this subparagraph; and
"(II) the impact of this subparagraph on participation in the Federal crop insurance program, including the impact on levels of coverage purchased."
Subsec. (b)(5)(C).
Subsec. (b)(9), (10).
Subsec. (b)(11).
Subsec. (c)(5)(A).
Subsec. (c)(5)(D).
Subsec. (c)(10)(C).
Subsec. (d)(1).
Subsec. (d)(4).
Subsec. (e)(2).
Subsec. (e)(3).
Subsec. (e)(4).
Subsec. (e)(5).
Subsec. (e)(6), (7).
Subsecs. (f), (h), (i).
Subsec. (j)(2)(A).
Subsec. (j)(5).
Subsec. (k)(1).
Subsec. (k)(4)(A).
Subsec. (k)(4)(D).
Subsec. (k)(4)(E), (F).
Subsec. (k)(8).
Subsec. (k)(9).
Subsec. (m).
Subsec. (m)(5).
Subsec. (n)(1).
Subsec. (o).
Subsec. (o)(2)(A)(i).
2005—Subsec. (a)(4)(B).
2002—Subsec. (a)(2).
Subsec. (e)(4).
Subsec. (m)(3).
Subsec. (m)(4).
2000—Subsec. (a)(3).
"(A) the neglect or malfeasance of the producer;
"(B) the failure of the producer to reseed to the same crop in such areas and under such circumstances as it is customary to reseed; or
"(C) the failure of the producer to follow good farming practices (as determined by the Secretary)."
Subsec. (a)(3)(C).
Subsec. (a)(5).
Subsec. (a)(7).
Subsec. (a)(8).
Subsec. (b)(3).
Subsec. (b)(5)(A).
Subsec. (b)(5)(B).
Subsec. (b)(5)(C).
Subsec. (b)(11).
Subsec. (c)(5).
"(A) shall not be less than the projected market price for the commodity (as determined by the Corporation); or
"(B) at the discretion of the Corporation, may be based on the actual market price at the time of harvest (as determined by the Corporation)."
Subsec. (c)(10).
Subsec. (d)(2)(B), (C).
Subsec. (d)(3).
Subsec. (e)(2).
Subsec. (e)(2)(B) to (G).
Subsec. (e)(4).
Subsec. (e)(5).
Subsec. (f)(3)(A).
Subsec. (g)(2)(B).
Subsec. (g)(2)(D).
Subsec. (g)(4), (5).
Subsec. (h)(1).
Subsec. (h)(2).
Subsec. (h)(3).
Subsec. (h)(4)(A).
Subsec. (h)(4)(B).
Subsec. (h)(4)(C), (D).
Subsec. (h)(5).
Subsec. (h)(6) to (10).
Subsec. (i).
Subsec. (k)(4)(C).
Subsec. (m).
1999—Subsec. (f)(2).
Subsec. (h)(9)(A).
1998—Subsec. (b)(5).
Subsec. (b)(11).
Subsec. (c)(10)(A).
Subsec. (c)(10)(C).
Subsec. (h)(10).
Subsec. (k)(4).
"(A) for the 1997 reinsurance year, 29 percent of the premium used to define loss ratio;
"(B) for the 1998 reinsurance year, 28 percent of the premium used to define loss ratio; and
"(C) for the 1999 reinsurance year, 27.5 percent of the premium used to define loss ratio."
Subsec. (n).
1996—Subsec. (a)(6)(D).
Subsec. (b)(4)(C).
Subsec. (b)(7)(A).
Subsec. (h)(9).
Subsec. (j)(4).
Subsec. (n).
1994—
1993—Subsec. (h).
Subsec. (n).
1991—Subsec. (a).
Subsecs. (k) to (n).
1990—
Subsec. (a).
Subsecs. (b) to (d).
Subsec. (e).
Subsec. (f).
Subsec. (g).
Subsec. (h).
Subsec. (i).
Subsec. (j).
Subsec. (k).
Subsec. (l).
Subsec. (m).
Subsec. (n).
1988—Subsec. (j).
1980—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Subsec. (e).
Subsec. (f).
Subsecs. (g), (h).
Subsec. (i).
1964—Subsec. (a).
1959—Subsec. (a).
1957—Subsec. (f).
1953—Subsec. (a). Act Aug. 13, 1953, authorized extension of Federal crop insurance program into an additional 100 counties, struck out commodity formula basis on which this expansion may take place, and provided an exception to the strict county limitation by providing that producers on farms situated in a local producing area bordering on a county with a crop insurance program may be included in that county's program.
1949—Subsec. (a). Act Aug. 25, 1949, §1, provided for an annual increase in number of counties in which insurance now offered by Corporation can be issued.
Subsec. (b). Act Aug. 25, 1949, §2, struck out provision under which Corporation's administrative expenses are restricted, after the crop year 1949, to a sum equivalent to 25 percent of the premiums collected in the preceding year.
Subsec. (c). Act Aug. 25, 1949, §3, struck out provision which required prorating of losses beginning with crop year 1950.
1947—Subsec. (a). Act Aug. 1, 1947, §1, amended subsec. (a) generally, and among other changes, provided for crop insurance, commencing with crops planted for harvest in 1948, made provision for reinsurance, enumerated specific crops insurable in 1948, provided for additional crops in subsequent years, limited number of counties in which certain crops were insurable, increased required number of applications in any one county from fifty to two hundred, and authorized Board to refuse insurance in any county where agricultural commodity to be insured constitutes an unimportant part of total agricultural income.
Subsec. (b). Act Aug. 1, 1947, §2, inserted proviso relating to basis for premiums.
Subsec. (c). Act Aug. 1, 1947, §3, inserted first proviso relating to determination of price basis for indemnities.
1944—Subsec. (a). Act Dec. 23, 1944, §1, amended subsec. (a) generally to provide insurance against loss not only for wheat and cotton crops but also for flax, corn, oats, etc.
Subsec. (b). Act Dec. 23, 1944, §2, provided for the establishment of such rates as would cover crop losses and build up a reasonable reserve, and inserted proviso.
Subsec. (c). Act Dec. 23, 1944, §3, inserted first proviso, and inserted "and received" after "mailed to" in last proviso.
1941—Subsec. (a). Act June 21, 1941, §§3–5, struck out comma after "1939" and inserted "and with the cotton crop planted for harvest in 1942", and substituted "producers of the agricultural commodity against loss in yields of the agricultural commodity" for "producers of wheat against loss in yields of wheat" in the first sentence, and "the agricultural commodity" for "wheat" in the third sentence, respectively.
Subsecs. (b), (c). Act June 21, 1941, §6, substituted "the agricultural commodity" for "wheat" wherever appearing.
Subsec. (d). Act June 21, 1941, §§6, 10, substituted "the agricultural commodity" for "wheat" wherever appearing, and inserted second sentence.
Subsec. (e). Act June 21, 1941, §7, added subsec. (e).
1938—Subsec. (a). Act June 22, 1938, inserted second proviso in first sentence.
Statutory Notes and Related Subsidiaries
Effective Date of 2015 Amendment
Effective Date of 2014 Amendment
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date of 2000 Amendment
Amendment by sections 101(a)–(c), 102(a), 103(a), (b)(1), (c), 104, 105(b), and 162 of
Effective Date of 1998 Amendment
Amendment by
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1993 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by section 107(b) of
Crop Insurance Coverage for Hemp
Consideration of Losses in Fiscal Year 2014 and Subsequent Fiscal Years
Expansion of Crop Insurance Pilots
Limitation on Fee for Catastrophic Risk Protection
[
Special Rule for 1996 Crop Year Regarding Catastrophic Risk Protection Insurance
"(A)
"(B)
"(C)
"(D)
"(i) the policy is a continuation of a policy that was obtained for a previous crop year; and
"(ii) the cancellation request is made before the acreage reporting date for the policy for the 1996 crop year."
Crop Insurance Pilot Program
"(1)
"(2)
"(3)
Prevented Planting
"(a)
"(1) obtaining from the Secretary of Agriculture the applicable amount that is payable under the conserving use program described in subsection (b)(4); and
"(2) obtaining from the Federal Crop Insurance Corporation the amount that is equal to the difference between—
"(A) the amount that is payable under the conserving use program; and
"(B) the amount that is payable under the prevented planting coverage policy.
"(b)
"(1) purchased a prevented planting policy for the 1994 crop year from the Federal Crop Insurance Corporation prior to the spring sales closing date for the 1994 crop year;
"(2) is unable to plant a crop due to major, widespread flooding in the Midwest, or excessive ground moisture, that occurred prior to the spring sales closing date for the 1994 crop year;
"(3) had a reasonable expectation of planting a crop on the prevented planting acreage for the 1994 crop year; and
"(4) participates in a conserving use program established for the 1994 crop of wheat, feed grains, upland cotton, or rice established under section 107B(c)(1)(E), 105B(c)(1)(E), 103B(c)(1)(D), or 101B(c)(1)(D), respectively, of the Agricultural Act of 1949 ([former] 7 U.S.C. 1445b–3a(c)(1)(E), 1444f(c)(1)(E), 1444–2(c)(1)(D), or 1441–2(c)(1)(D)).
"(c)
"(1)
"(2)
"(d)
Report on Improving Dissemination of Crop Insurance Information
Federal Crop Insurance Commission
Loss Adjustment Obligations
"(1) should not be required to assume 100 percent of all loss adjustments in the Federal crop insurance program; and
"(2) should assume and perform the loss adjustment obligations of a reinsured company if the Corporation determines that such company's loss adjustment performance and practices are not carried out in accordance with the applicable reinsurance agreement."
Notice to Producers of Right To Elect Subsidized Crop Insurance or Disaster Payments on 1981 Crops
Study of Alternative All-Risk, All-Crop Insurance Programs
Validity and Termination of Prior Insurance Contracts
Act Aug. 1, 1947, ch. 440, §5,
Executive Documents
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
1 So in original. The comma probably should not appear.
2 See References in Text note below.
§1508a. Double insurance and prevented planting
(a) Definitions
In this section:
(1) First crop
The term "first crop" means the first crop of the first agricultural commodity planted for harvest, or prevented from being planted, on specific acreage during a crop year and insured under this subchapter.
(2) Second crop
The term "second crop" means a second crop of the same agricultural commodity as the first crop, or a crop of a different agricultural commodity following the first crop, planted on the same acreage as the first crop for harvest in the same crop year, except the term does not include a replanted crop.
(3) Replanted crop
The term "replanted crop" means any agricultural commodity replanted on the same acreage as the first crop for harvest in the same crop year if the replanting is required by the terms of the policy of insurance covering the first crop.
(b) Double insurance
(1) Options on loss to first crop
Except as provided in subsections (d) and (e), if a first crop insured under this subchapter in a crop year has a total or partial insurable loss, the producer of the first crop may elect one of the following options:
(A) No second crop planted
The producer may—
(i) elect to not plant a second crop on the same acreage for harvest in the same crop year; and
(ii) collect an indemnity payment that is equal to 100 percent of the insurable loss for the first crop.
(B) Second crop planted
The producer may—
(i) plant a second crop on the same acreage for harvest in the same crop year; and
(ii) collect an indemnity payment established by the Corporation for the first crop, but not to exceed 35 percent of the insurable loss for the first crop.
(2) Effect of no loss to second crop
If a producer makes an election under paragraph (1)(B) and the producer does not suffer an insurable loss to the second crop, the producer may collect an indemnity payment for the first crop that is equal to—
(A) 100 percent of the insurable loss for the first crop; less
(B) the amount previously collected under paragraph (1)(B)(ii).
(3) Premium for first crop if second crop planted
(A) Initial premium
If a producer makes an election under paragraph (1)(B), the producer shall be responsible for a premium for the first crop that is commensurate with the indemnity paid under paragraph (1)(B)(ii). The Corporation shall adjust the total premium for the first crop to reflect the reduced indemnity.
(B) Effect of no loss to second crop
If the producer makes an election under paragraph (1)(B) and the producer does not suffer an insurable loss to the second crop, the producer shall be responsible for a premium for the first crop that is equal to—
(i) the full premium owed by the producer for the first crop; less
(ii) the amount of premium previously paid under subparagraph (A).
(c) Prevented planting coverage
(1) Options on loss to first crop
Except as provided in subsections (d) and (e), if a first crop insured under this subchapter in a crop year is prevented from being planted, the producer of the first crop may elect one of the following options:
(A) No second crop planted
The producer may—
(i) elect to not plant a second crop on the same acreage for harvest in the same crop year; and
(ii) subject to paragraph (4), collect an indemnity payment that is equal to 100 percent of the prevented planting guarantee for the acreage for the first crop.
(B) Second crop planted
The producer may—
(i) plant a second crop on the same acreage for harvest in the same crop year; and
(ii) subject to paragraphs (4) and (5), collect an indemnity payment established by the Corporation for the first crop, but not to exceed 35 percent of the prevented planting guarantee for the acreage for the first crop.
(2) Premium for first crop if second planted
If the producer makes an election under paragraph (1)(B), the producer shall pay a premium for the first crop that is commensurate with the indemnity paid under paragraph (1)(B)(ii). The Corporation shall adjust the total premium for the first crop to reflect the reduced indemnity.
(3) Effect on actual production history
Except in the case of double cropping described in subsection (d), if a producer make an election under paragraph (1)(B) for a crop year, the Corporation shall assign the producer a recorded yield for that crop year for the first crop equal to 60 percent of the producer's actual production history for the agricultural commodity involved, for purposes of determining the producer's actual production history for subsequent crop years.
(4) Area conditions required for payment
The Corporation shall limit prevented planting payments for producers to those situations in which other producers, in the area where a first crop is prevented from being planted is located, are also generally affected by the conditions that prevented the first crop from being planted.
(5) Planting date
If a producer plants the second crop before the latest planting date established by the Corporation for the first crop, the Corporation shall not make a prevented planting payment with regard to the first crop.
(d) Exception for established double cropping practices
A producer may receive full indemnity payments on two or more crops planted for harvest in the same crop year and insured under this subchapter if each of the following conditions are met:
(1) There is an established practice of planting two or more crops for harvest in the same crop year in the area, as determined by the Corporation.
(2) An additional coverage policy or plan of insurance is offered with respect to the agricultural commodities planted on the same acreage for harvest in the same crop year in the area.
(3) The producer has a history of planting two or more crops for harvest in the same crop year or the applicable acreage has historically had two or more crops planted for harvest in the same crop year.
(4) The second or more crops are customarily planted after the first crop for harvest on the same acreage in the same year in the area.
(e) Subsequent crops
Except in the case of double cropping described in subsection (d), if a producer elects to plant a crop (other than a replanted crop) subsequent to a second crop on the same acreage as the first crop and second crop for harvest in the same crop year, the producer shall not be eligible for insurance under this subchapter, or noninsured crop assistance under
(Feb. 16, 1938, ch. 30, title V, §508A, as added
Editorial Notes
Codification
Prior Provisions
A prior section 1508a, act Feb. 16, 1938, ch. 30, title V, §508A, as added Aug. 14, 1989,
Amendments
2008—
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date
Section applicable beginning with the 2001 crop of an agricultural commodity, see section 171(b)(2)(F) of
§1508b. Stacked Income Protection Plan for producers of upland cotton
(a) Availability
Beginning not later than the 2015 crop of upland cotton, the Corporation shall make available to producers of upland cotton an additional policy (to be known as the "Stacked Income Protection Plan"), which shall provide coverage consistent with the Group Risk Income Protection Plan (and the associated Harvest Revenue Option Endorsement) offered by the Corporation for the 2011 crop year.
(b) Required terms
The Corporation may modify the Stacked Income Protection Plan on a program-wide basis, except that the Stacked Income Protection Plan shall comply with the following requirements:
(1) Provide coverage for revenue loss of not less than 10 percent and not more than 30 percent of expected county revenue, specified in increments of 5 percent. The deductible shall be the minimum percent of revenue loss at which indemnities are triggered under the plan, not to be less than 10 percent of the expected county revenue.
(2) Be offered to producers of upland cotton in all counties with upland cotton production—
(A) at a county-wide level to the fullest extent practicable; or
(B) in counties that lack sufficient data, on the basis of such larger geographical area as the Corporation determines to provide sufficient data for purposes of providing the coverage.
(3) Be purchased in addition to any other individual or area coverage in effect on the producer's acreage or as a stand-alone policy, except that if a producer has an individual or area coverage for the same acreage, the maximum coverage available under the Stacked Income Protection Plan shall not exceed the deductible for the individual or area coverage.
(4) Establish coverage based on—
(A) the expected price established under existing Group Risk Income Protection or area wide policy offered by the Corporation for the applicable county (or area) and crop year; and
(B) an expected county yield that is the higher of—
(i) the expected county yield established for the existing area-wide plans offered by the Corporation for the applicable county (or area) and crop year (or, in geographic areas where area-wide plans are not offered, an expected yield determined in a manner consistent with those of area-wide plans); or
(ii) the average of the applicable yield data for the county (or area) for the most recent 5 years, excluding the highest and lowest observations, from the Risk Management Agency or the National Agricultural Statistics Service (or both) or, if sufficient county data is not available, such other data considered appropriate by the Secretary.
(5) Use a multiplier factor to establish maximum protection per acre (referred to as a "protection factor") of not less than the higher of the level established on a program wide basis or 120 percent.
(6) Pay an indemnity based on the amount that the expected county revenue exceeds the actual county revenue, as applied to the individual coverage of the producer. Indemnities under the Stacked Income Protection Plan shall not include or overlap the amount of the deductible selected under paragraph (1).
(7) In all counties for which data are available, establish separate coverage levels for irrigated and nonirrigated practices.
(c) Premium
Notwithstanding
(1) be sufficient to cover anticipated losses and a reasonable reserve; and
(2) include an amount for operating and administrative expenses established in accordance with
(d) Payment of portion of premium by corporation
Subject to
(1) 80 percent of the amount of the premium established under subsection (c) for the coverage level selected; and
(2) the amount determined under subsection (c)(2), subject to
(e) Relation to other coverages
The Stacked Income Protection Plan is in addition to all other coverages available to producers of upland cotton.
(f) Limitation
Effective beginning with the 2019 crop year, a farm shall not be eligible for the Stacked Income Protection Plan for upland cotton for a crop year for which the farm is enrolled in coverage for seed cotton under—
(1) price loss coverage under
(2) agriculture risk coverage under
(Feb. 16, 1938, ch. 30, title V, §508B, as added
Editorial Notes
Amendments
2018—Subsec. (f).
§1508c. Peanut revenue crop insurance
(a) In general
Effective beginning with the 2015 crop year, the Risk Management Agency and the Corporation shall make available to producers of peanuts a revenue crop insurance program for peanuts.
(b) Effective price
Subject to subsection (c), for purposes of the revenue crop insurance program and the multiperil crop insurance program under this subchapter, the effective price for peanuts shall be equal to the Rotterdam price index for peanuts or other appropriate price as determined by the Secretary, as adjusted to reflect the farmer stock price of peanuts in the United States.
(c) Adjustments
(1) In general
The effective price for peanuts established under subsection (b) may be adjusted by the Risk Management Agency and the Corporation to correct distortions.
(2) Administration
If an adjustment is made under paragraph (1), the Risk Management Agency and the Corporation shall—
(A) make the adjustment in an open and transparent manner; and
(B) submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes the reasons for the adjustment.
(Feb. 16, 1938, ch. 30, title V, §508C, as added
§1508d. Coverage for forage and grazing
Notwithstanding
(Feb. 16, 1938, ch. 30, title V, §508D, as added
§1509. Exemption of indemnities from levy
Claims for indemnities under this subchapter shall not be liable to attachment, levy, garnishment, or any other legal process before payment to the insured or to deduction on account of the indebtedness of the insured or the estate of the insured to the United States except claims of the United States or the Corporation arising under this subchapter.
(Feb. 16, 1938, ch. 30, title V, §509,
Editorial Notes
Codification
Amendments
2008—
1994—
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date of 1994 Amendment
Amendment by
Executive Documents
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
§1510. Deposit and investment of funds; Federal Reserve banks as fiscal agents
All money of the Corporation not otherwise employed may be deposited with the Treasurer of the United States or in any bank approved by the Secretary of the Treasury, subject to withdrawal by the Corporation at any time, or with the approval of the Secretary of the Treasury may be invested in obligations of the United States or in obligations guaranteed as to principal and interest by the United States. Subject to the approval of the Secretary of the Treasury, the Federal Reserve banks are hereby authorized and directed to act as depositories, custodians, and fiscal agents for the Corporation in the performance of its powers conferred by this subchapter.
(Feb. 16, 1938, ch. 30, title V, §510,
Editorial Notes
Codification
Amendments
2008—
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Executive Documents
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
§1511. Tax exemption
The Corporation, including its franchise, its capital, reserves, and surplus, and its income and property, shall be exempt from all taxation on or after February 16, 1938, imposed by the United States or by any Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority. A contract of insurance of the Corporation, and a contract of insurance reinsured by the Corporation, shall be exempt from taxation imposed by any State, municipality, or local taxing authority.
(Feb. 16, 1938, ch. 30, title V, §511,
Editorial Notes
Amendments
1994—
Statutory Notes and Related Subsidiaries
Effective Date of 1994 Amendment
Amendment by
Executive Documents
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
§1512. Corporation as fiscal agent of Government
When designated for that purpose by the Secretary of the Treasury, the Corporation shall be a depository of public money, except receipts from customs, under such regulations as may be prescribed by said Secretary; and it may also be employed as a financial agent of the Government; and it shall perform all such reasonable duties, as a depository of public money and financial agent of the Government, as may be required of it.
(Feb. 16, 1938, ch. 30, title V, §512,
Executive Documents
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
§1513. Books of account and annual reports of Corporation
The Corporation shall at all times maintain complete and accurate books of accounts and shall file annually with the Secretary a complete report as to the business of the Corporation.
(Feb. 16, 1938, ch. 30, title V, §513,
Editorial Notes
Amendments
1994—
1975—
Statutory Notes and Related Subsidiaries
Effective Date of 1994 Amendment
Amendment by
Audit of Government Corporations
Executive Documents
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
§1514. Crimes and offenses
(a) to (e) Repealed. June 25, 1948, ch. 645, §21, 62 Stat. 862 , eff. Sept. 1, 1948
(f) Application of laws on interest of Members of Congress in contracts
The provisions of
(Feb. 16, 1938, ch. 30, title V, §514,
Editorial Notes
Codification
In subsec. (f), "
Amendments
2008—Subsec. (f).
1948—Subsecs. (a) to (e). Act June 25, 1948, §21, repealed provisions relating to crimes and offenses. See sections 371, 433, 657, 658, 1006, 1014, and former
Subsec. (f). Act June 25, 1948, §4, struck out provisions relating to former
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date of 1948 Amendment
Amendment by act June 25, 1948, effective Sept. 1, 1948, see section 20 of that act.
Executive Documents
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
§1515. Program compliance and integrity
(a) Purpose
(1) In general
The purpose of this section is to improve compliance with, and the integrity of, the Federal crop insurance program.
(2) Role of insurance providers
The Corporation shall work actively with approved insurance providers to address program compliance and integrity issues as such issues develop.
(b) Notification of compliance problems
(1) Notification of errors, omissions, and failures
The Corporation shall notify in writing an approved insurance provider of any error, omission, or failure to follow Corporation regulations or procedures for which the approved insurance provider may be responsible and which may result in a debt owed the Corporation.
(2) Time for notification
Notice under paragraph (1) shall be given within 3 years after the end of the insurance period during which the error, omission, or failure is alleged to have occurred, except that this time limitation shall not apply with respect to an error, omission, or procedural violation that is willful or intentional.
(3) Effect of failure to timely notify
Except as provided in paragraph (2), the failure to timely provide the notice required under this subsection shall relieve the approved insurance provider from the debt owed the Corporation.
(c) Reconciling producer information
(1) In general
The Secretary shall develop and implement a coordinated plan for the Corporation and the Farm Service Agency to reconcile all relevant information received by the Corporation or the Farm Service Agency from a producer who obtains crop insurance coverage under this subchapter.
(2) Frequency
Beginning with the 2001 crop year, the Secretary shall require that the Corporation and the Farm Service Agency reconcile such producer-derived information on at least an annual basis in order to identify and address any discrepancies.
(3) Corrections
(A) In general
In addition to the corrections permitted by the Corporation as of the day before February 7, 2014, the Corporation shall establish procedures that allow an agent or an approved insurance provider, subject to subparagraph (B)—
(i) within a reasonable amount of time following the applicable sales closing date, to correct errors in information that is provided by a producer for the purpose of obtaining coverage under any policy or plan of insurance made available under this subchapter to ensure that the eligibility information is correct and consistent with information reported by the producer for other programs administered by the Secretary;
(ii) within a reasonable amount of time following—
(I) the acreage reporting date, to reconcile errors in the information reported by the producer with correct information determined from any other program administered by the Secretary; or
(II) the date of any subsequent correction of data by the Farm Service Agency made as a result of the verification of information, to make conforming corrections; and
(iii) at any time, to correct electronic transmission errors that were made by an agent or approved insurance provider, or such errors made by the Farm Service Agency or any other agency of the Department of Agriculture in transmitting the information provided by the producer for purposes of other programs of the Department to the extent an agent or approved insurance provider relied upon the erroneous information for crop insurance purposes.
(B) Limitation
In accordance with the procedures of the Corporation, correction to the information described in clauses (i) and (ii) of subparagraph (A) may only be made if the corrections do not allow the producer—
(i) to avoid ineligibility requirements for insurance or obtain a disproportionate benefit under the crop insurance program or any related program administered by the Secretary;
(ii) to obtain, enhance, or increase an insurance guarantee or indemnity if a cause of loss exists or has occurred before any correction has been made, or avoid premium owed if no loss is likely to occur; or
(iii) to avoid an obligation or requirement under any Federal or State law.
(C) Exception to late filing sanctions
Any corrections made within a reasonable amount of time, in accordance with established procedures, pursuant to this paragraph shall not be subject to any late filing sanctions authorized in the reinsurance agreement with the Corporation.
(D) Late payment of debt
In the case of a producer that has inadvertently failed to pay a debt due as specified by regulations of the Corporation and has been determined to be ineligible for crop insurance pursuant to the terms of the policy as a result of that failure, the Corporation may determine to allow the producer to pay the debt and purchase the crop insurance after the sales closing date, in accordance with procedures and limitations established by the Corporation.
(d) Identification and elimination of fraud, waste, and abuse
(1) FSA monitoring program
The Secretary shall develop and implement a coordinated plan for the Farm Service Agency to assist the Corporation in the ongoing monitoring of programs carried out under this subchapter, including—
(A) at the request of the Corporation or, subject to paragraph (2), on its own initiative if the Farm Service Agency has reason to suspect the existence of program fraud, waste, or abuse, conducting fact finding relative to allegations of program fraud, waste, or abuse;
(B) reporting to the Corporation, in writing in a timely manner, the results of any fact finding conducted pursuant to subparagraph (A), any allegation of fraud, waste, or abuse, and any identified program vulnerabilities;
(C) assisting the Corporation and approved insurance providers in auditing a statistically appropriate number of claims made under any policy or plan of insurance under this subchapter; and
(D) using published aggregate data from the National Agricultural Statistics Service or any other data source to—
(i) detect yield disparities or other data anomalies that indicate potential fraud; and
(ii) target the relevant counties, crops, regions, companies, or agents associated with that potential fraud for audits and other enforcement actions.
(2) FSA inquiry
If, within five calendar days after receiving a report submitted under paragraph (1)(B), the Corporation does not provide a written response that describes the intended actions of the Corporation, the Farm Service Agency may conduct its own inquiry into the alleged program fraud, waste, or abuse on approval from the State director of the Farm Service Agency of the State in which the alleged fraud, waste, or abuse occurred. If as a result of the inquiry, the Farm Service Agency concludes further investigation is warranted, but the Corporation declines to proceed with the investigation, the Farm Service Agency may refer the matter to the Inspector General of the Department of Agriculture.
(3) Use of field infrastructure
The plan required by paragraph (1) shall provide for the use of the field infrastructure of the Farm Service Agency. The Secretary shall ensure that relevant Farm Service Agency personnel are appropriately trained for any responsibilities assigned to the personnel under the plan. At a minimum, the personnel shall receive the same level of training and pass the same basic competency tests as required of loss adjusters of approved insurance providers.
(4) Maintenance of provider effort
(A) In general
The activities of the Farm Service Agency under this subsection do not affect the responsibility of approved insurance providers to conduct any audits of claims or other program reviews required by the Corporation.
(B) Notification of providers
The Corporation shall notify the appropriate approved insurance provider of a report from the Farm Service Agency regarding alleged program fraud, waste, or abuse, unless the provider is suspected to be included in, or a party to, the alleged fraud, waste, or abuse.
(C) Response
An approved insurance provider that receives a notice under subparagraph (B) shall submit a report to the Corporation, within an appropriate time period determined by the Secretary, describing the actions taken by the provider to investigate the allegations of program fraud, waste, or abuse contained in the notice.
(5) Corporation response to provider reports
(A) Prompt response
If an approved insurance provider reports to the Corporation that the approved insurance provider suspects intentional misrepresentation, fraud, waste, or abuse, the Corporation shall make a determination and provide, within 90 calendar days after receiving the report, a written response that describes the intended actions of the Corporation.
(B) Cooperative effort
The approved insurance provider and the Corporation shall take coordinated action in any case where misrepresentation, fraud, waste, or abuse is alleged.
(C) Failure to timely respond
If the Corporation fails to respond as required by subparagraph (A), an approved insurance provider may request the Farm Service Agency to assist the provider in an inquiry into the alleged program fraud, waste, or abuse.
(e) Consultation with State FSA committees
The Secretary shall establish procedures under which the Corporation shall consult with the State committee of the Farm Service Agency for a State with respect to policies, plans of insurance, and material related to such policies or plans of insurance (including applicable sales closing dates, assigned yields, and transitional yields) offered in that State under this subchapter.
(f) Detection of disparate performance
(1) Covered activities
The Secretary shall establish procedures under which the Corporation will be able to identify the following:
(A) Any agent engaged in the sale of coverage offered under this subchapter where the loss claims associated with such sales by the agent are equal to or greater than 150 percent (or an appropriate percentage specified by the Corporation) of the mean for all loss claims associated with such sales by all other agents operating in the same area, as determined by the Corporation.
(B) Any person performing loss adjustment services relative to coverage offered under this subchapter where such loss adjustments performed by the person result in accepted or denied claims equal to or greater than 150 percent (or an appropriate percentage specified by the Corporation) of the mean for accepted or denied claims (as applicable) for all other persons performing loss adjustment services in the same area, as determined by the Corporation.
(2) Review
(A) Review required
The Corporation shall conduct a review of any agent identified under paragraph (1)(A), and any person identified under paragraph (1)(B), to determine whether the higher loss claims associated with the agent or the higher number of accepted or denied claims (as applicable) associated with the person are the result of fraud, waste, or abuse.
(B) Remedial action
The Corporation shall take appropriate remedial action with respect to any occurrence of fraud, waste, or abuse identified in a review conducted under this paragraph.
(3) Oversight of agents and loss adjusters
The Corporation shall develop procedures to require an annual review by an approved insurance provider of the performance of each agent and loss adjuster used by the approved insurance provider. The Corporation shall oversee the conduct of annual reviews and may consult with an approved insurance provider regarding any remedial action that is determined to be necessary as a result of the annual review of an agent or loss adjuster.
(g) Submission of information to Corporation to support compliance efforts
(1) Types of information required
The Secretary shall establish procedures under which approved insurance providers shall submit to the Corporation the following information with respect to each policy or plan of insurance offered under this subchapter:
(A) The name and identification number of the insured.
(B) The agricultural commodity to be insured.
(C) The elected coverage level, including the price election, of the insured.
(D) The actual production history to be used to establish insurable yields.
(2) Time for submission
(A) In general
The information required to be submitted under subparagraphs (A) through (C) of paragraph (1) with respect to a policy or plan of insurance shall be submitted so as to ensure receipt by the Corporation not later than the Saturday of the week containing the calendar day that is 30 days after the applicable sales closing date for the crop to be insured.
(B) Actual production history
(i) In general
The information required to be submitted under paragraph (1)(D) with respect to an applicable policy or plan of insurance for a covered commodity (as defined in
(ii) Correction of errors
Nothing in clause (i) limits the ability of an approved insurance provider to correct any error in the information submitted under paragraph (1)(D) after receipt of the information by the Corporation in accordance with clause (i).
(h) Sanctions for program noncompliance and fraud
(1) False information
A producer, agent, loss adjuster, approved insurance provider, or other person that willfully and intentionally provides any false or inaccurate information to the Corporation or to an approved insurance provider with respect to a policy or plan of insurance under this subchapter may, after notice and an opportunity for a hearing on the record, be subject to one or more of the sanctions described in paragraph (3).
(2) Compliance
A person may, after notice and an opportunity for a hearing on the record, be subject to one or more of the sanctions described in paragraph (3) if the person is a producer, agent, loss adjuster, approved insurance provider, or other person that willfully and intentionally fails to comply with a requirement of the Corporation.
(3) Authorized sanctions
If the Secretary determines that a person covered by this subsection has committed a material violation under paragraph (1) or (2), the following sanctions may be imposed:
(A) Civil fines
A civil fine may be imposed for each violation in an amount not to exceed the greater of—
(i) the amount of the pecuniary gain obtained as a result of the false or inaccurate information provided or the noncompliance with a requirement of this subchapter; or
(ii) $10,000.
(B) Producer disqualification
In the case of a violation committed by a producer, the producer may be disqualified for a period of up to 5 years from receiving any monetary or nonmonetary benefit provided under each of the following:
(i) This subchapter.
(ii) The Agricultural Market Transition Act (
(iii) The Agricultural Act of 1949 (
(iv) The Commodity Credit Corporation Charter Act (
(v) The Agricultural Adjustment Act of 1938 (
(vi) Title XII of the Food Security Act of 1985 (
(vii) The Consolidated Farm and Rural Development Act (
(viii) Any law that provides assistance to a producer of an agricultural commodity affected by a crop loss or a decline in the prices of agricultural commodities.
(C) Disqualification of other persons
In the case of a violation committed by an agent, loss adjuster, approved insurance provider, or other person (other than a producer), the violator may be disqualified for a period of up to 5 years from participating in any program, or receiving any benefit, under this subchapter.
(4) Assessment of sanction
The Secretary shall consider the gravity of the violation of the person covered by this subsection in determining—
(A) whether to impose a sanction under this subsection; and
(B) the type and amount of the sanction to be imposed.
(5) Disclosure of sanctions
Each policy or plan of insurance under this subchapter shall provide notice describing the sanctions prescribed under paragraph (3) for willfully and intentionally—
(A) providing false or inaccurate information to the Corporation or to an approved insurance provider; or
(B) failing to comply with a requirement of the Corporation.
(6) Insurance fund
Any funds collected under this subsection shall be deposited into the insurance fund established under
(i) Annual report on program compliance and integrity efforts
(1) Report required
The Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate an annual report describing the operation of this section during the preceding year and efforts undertaken by the Secretary and the Corporation to carry out this section.
(2) Information regarding fraud, waste, and abuse
The report shall identify specific occurrences of waste, fraud, or abuse and contain an outline of actions that have been or are being taken to eliminate the identified waste, fraud, or abuse.
(j) Information management
(1) Systems maintenance and upgrades
(A) In general
The Secretary shall maintain and upgrade the information management systems of the Corporation used in the administration and enforcement of this subchapter.
(B) Requirement
(i) In general
In maintaining and upgrading the systems, the Secretary shall ensure that new hardware and software are compatible with the hardware and software used by other agencies of the Department to maximize data sharing and promote the purposes of this section.
(ii) Acreage report streamlining initiative project
As soon as practicable, the Secretary shall develop and implement an acreage report streamlining initiative project to allow producers to report acreage and other information directly to the Department.
(2) Use of available information technologies
The Secretary shall use the information technologies known as data mining and data warehousing and other available information technologies to administer and enforce this subchapter.
(3) Use of private sector
The Secretary may enter into contracts to use private sector expertise and technological resources in implementing this subsection, which shall be subject to competition on a periodic basis, as determined by the Secretary.
(k) Continuing education for loss adjusters and agents
(1) In general
The Corporation shall establish requirements for continuing education for loss adjusters and agents of approved insurance providers.
(2) Requirements
The requirements for continuing education described in paragraph (1) shall ensure that loss adjusters and agents of approved insurance providers are familiar with—
(A) the policies and plans of insurance available under this subchapter, including the regulations promulgated to carry out this subchapter;
(B) efforts to promote program integrity through the elimination of waste, fraud, and abuse; and
(C) other aspects of adjusting, delivering, and servicing policies and plans of insurance by adjustors and agents, as determined by the Secretary, including conservation activities and agronomic practices (including organic and sustainable practices) that are common and appropriate to the area in which the insured crop being inspected is produced.
(l) Funding
(1) Information technology
(A) In general
For purposes of subsection (j)(1), the Corporation may use, from amounts made available from the insurance fund established under
(i)(I) for fiscal year 2014, $14,000,000; and
(II) for each of fiscal years 2015 through 2018, $9,000,000; or
(ii) if the Acreage Crop Reporting Streamlining Initiative (ACRSI) project is substantially completed by September 30, 2015, not more than $14,000,000 for each of the fiscal years 2015 through 2018.
(B) Notification
The Secretary shall notify the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate of the substantial completion of the Acreage Crop Reporting Streamlining Initiative (ACRSI) project not later than July 1, 2015.
(2) Data mining
To carry out subsection (j)(2), the Corporation may use, from amounts made available from the insurance fund established under
(Feb. 16, 1938, ch. 30, title V, §515, as added
Editorial Notes
References in Text
The Agricultural Market Transition Act, referred to in subsec. (h)(3)(B)(ii), is title I of
The Agricultural Act of 1949, referred to in subsec. (h)(3)(B)(iii), is act Oct. 31, 1949, ch. 792,
The Commodity Credit Corporation Charter Act, referred to in subsec. (h)(3)(B)(iv), is act June 29, 1948, ch. 704,
The Agricultural Adjustment Act of 1938, referred to in subsec. (h)(3)(B)(v), is act Feb. 16, 1938, ch. 30,
The Food Security Act of 1985, referred to in subsec. (h)(3)(B)(vi), is
The Consolidated Farm and Rural Development Act, referred to in subsec. (h)(3)(B)(vii), is title III of
This subchapter, referred to in subsec. (k)(2)(A), was in the original "this Act", meaning the Federal Crop Insurance Act, which is subtitle A of title V of act Feb. 16, 1938, ch. 30.
Codification
Prior Provisions
A prior section 1515, act Feb. 16, 1938, ch. 30, title V, §515,
Amendments
2018—Subsec. (d)(1)(D).
Subsec. (f)(2)(A).
Subsec. (g)(1)(D).
Subsec. (g)(2).
Subsecs. (k), (l).
2014—Subsec. (c).
Subsec. (j)(1).
Subsec. (k)(1).
2008—Subsecs. (c) to (h).
Subsec. (h)(3)(B)(i).
Subsec. (j)(1), (2).
Subsec. (j)(3).
Subsec. (k).
Subsec. (k)(1).
2000—
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date
Section effective Oct. 13, 1994, and applicable to provision of crop insurance under Federal Crop Insurance Act (
§1516. Funding
(a) Authorization of appropriations
(1) Discretionary expenses
There are authorized to be appropriated for fiscal year 1999 and each subsequent fiscal year such sums as are necessary to cover the salaries and expenses of the Corporation.
(2) Mandatory expenses
There are authorized to be appropriated such sums as are necessary to cover for each of the 1999 and subsequent reinsurance years the following:
(A) The administrative and operating expenses of the Corporation for the sales commissions of agents.
(B) Premium subsidies, including the administrative and operating expenses of an approved insurance provider for the delivery of policies with additional coverage.
(C) Costs associated with the conduct of livestock and wild salmon pilot programs carried out under
(D) Costs associated with the reimbursement, contracting, and partnerships for research and development under
(b) Payment of Corporation expenses from insurance fund
(1) Expenses generally
For each of the 1999 and subsequent reinsurance years, the Corporation may pay from the insurance fund established under subsection (c) all expenses of the Corporation (other than expenses covered by subsection (a)(1) and expenses covered by paragraph (2)(A)), including the following:
(A) Premium subsidies and indemnities.
(B) Administrative and operating expenses of the Corporation necessary to pay the sales commissions of agents.
(C) All administrative and operating expense reimbursements due under a reinsurance agreement with an approved insurance provider.
(D) Costs associated with the conduct of livestock and wild salmon pilot programs carried out under
(E) Costs associated with the reimbursement, contracting, and partnerships for research and development under
(2) Policy consideration and implementation
(A) In general
For each of the 1999 and subsequent reinsurance years, the Corporation may use the insurance fund established under subsection (c), but not to exceed $3,500,000 for each fiscal year, to pay the following:
(i) Costs associated with the consideration and implementation of policies, plans of insurance, and related materials submitted under
(ii) Costs to contract for the review of policies, plans of insurance, and related materials under
(B) Dairy options pilot program
Amounts necessary to carry out the dairy options pilot program shall not be counted toward the limitation on expenses specified in subparagraph (A).
(C) Reviews, compliance, and integrity
(i) In general
For each of the 2014 and subsequent reinsurance years, the Corporation may use the insurance fund established under subsection (c), but not to exceed $7,000,000 for each fiscal year, to pay costs—
(I) to reimburse expenses incurred for the operations and review of policies, plans of insurance, and related materials (including actuarial and related information); and
(II) to assist the Corporation in maintaining program actuarial soundness and financial integrity.
(ii) Secretarial action
For the purposes described in clause (i), the Secretary may, without further appropriation—
(I) merge some or all of the funds made available under this subparagraph into the accounts of the Risk Management Agency; and
(II) obligate those funds.
(iii) Maintenance of funding
Funds made available under this subparagraph shall be in addition to other funds made available for costs incurred by the Corporation or the Risk Management Agency.
(c) Insurance fund
(1) In general
There is established an insurance fund, for the deposit of premium income, amounts made available under subsection (a)(2), and civil fines collected under
(2) Commodity Credit Corporation funds
If at any time the amounts in the insurance fund are insufficient to enable the Corporation to carry out subsection (b), to the extent the funds of the Commodity Credit Corporation are available—
(A) the Corporation may request the Secretary to use the funds of the Commodity Credit Corporation to carry out subsection (b); and
(B) the Secretary may use the funds of the Commodity Credit Corporation to carry out subsection (b).
(Feb. 16, 1938, ch. 30, title V, §516,
Editorial Notes
Amendments
2018—Subsecs. (a)(2)(C), (b)(1)(D).
Subsec. (b)(2)(C)(i).
2014—Subsec. (b)(2)(C).
2000—Subsec. (a)(2).
Subsec. (b)(1).
Subsec. (b)(2).
Subsec. (b)(2)(A).
Subsec. (b)(2)(B).
Subsec. (c)(1).
1998—Subsec. (a)(1).
"(A) the salaries and expenses of the Corporation; and
"(B) the administrative and operating expenses of the Corporation for the sales commissions of agents."
Subsec. (a)(2).
Subsec. (a)(2)(A).
Subsec. (b).
"(1)
"(2)
"(A) all other expenses of the Corporation (other than expenses covered by subsection (a)(1) of this section), including all premium subsidies and indemnities;
"(B) in the case of each of the 1995 through 1997 reinsurance years, all administrative and expense reimbursements due under a reinsurance agreement with an approved insurance provider; and
"(C) to the extent necessary, expenses incurred by the Corporation to carry out research and development."
1996—Subsec. (a)(2)(C).
Subsec. (b)(1).
Subsec. (b)(2)(A).
Subsec. (b)(2)(B).
1994—
1985—Subsec. (c)(1).
1981—Subsec. (a).
1980—Subsec. (a).
Subsecs. (c), (d).
1956—Subsec. (a). Act Aug. 3, 1956, added to list of costs which may be considered as nonadministrative or nonoperating, the direct cost of loss adjusters for crop inspections and loss adjustment, and authorized use of premium income for administrative and operating costs within limits prescribed by applicable appropriation.
1941—Subsec. (a). Act June 21, 1941, substituted "the agricultural commodity" for "wheat", and "$12,000,000" for "$6,000,000".
Statutory Notes and Related Subsidiaries
Effective Date of 1998 Amendment
Amendment by
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1980 Amendment
Additional Appropriation
Act Dec. 23, 1944, ch. 713, §6,
Executive Documents
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
§1517. Separability
The sections of this subchapter and subdivisions of sections are declared to be separable, and in the event any one or more sections or parts of the same of this subchapter be held to be unconstitutional, the same shall not affect the validity of other sections or parts of sections of this subchapter.
(Feb. 16, 1938, ch. 30, title V, §517,
Editorial Notes
Codification
Amendments
2008—
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment of this section and repeal of
§1518. "Agricultural commodity" defined
"Agricultural commodity", as used in this subchapter, means wheat, cotton, flax, corn, dry beans, oats, barley, rye, tobacco, rice, peanuts, soybeans, sugar beets, sugar cane, tomatoes, grain sorghum, sunflowers, raisins, oranges, sweet corn, dry peas, freezing and canning peas, forage, apples, grapes, potatoes, timber and forests, nursery crops, citrus, and other fruits and vegetables, nuts, tame hay, native grass, hemp, aquacultural species (including, but not limited to, any species of finfish, mollusk, crustacean, or other aquatic invertebrate, amphibian, reptile, or aquatic plant propagated or reared in a controlled or selected environment), or any other agricultural commodity, excluding stored grain, determined by the Board, or any one or more of such commodities, as the context may indicate.
(Feb. 16, 1938, ch. 30, title V, §518, as added June 21, 1941, ch. 214, §9,
Editorial Notes
Codification
Prior Provisions
A former section 1518, act Feb. 16, 1938, ch. 30, title V, §518,
Amendments
2018—
2008—
2000—
1994—
1991—
1980—
1949—Act Aug. 25, 1949, amended section to correct a clerical error in citation of "subsection (a) of section 1508".
1944—Act Dec. 23, 1944, increased scope of definition of "agricultural commodity" from "wheat or cotton" to include all crops now set out.
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date of 2000 Amendment
Amendment by
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
§1519. Repealed. Pub. L. 104–127, title I, §196(j), Apr. 4, 1996, 110 Stat. 950
Section, act Feb. 16, 1938, ch. 30, title V, §519, formerly §518,
§1520. Producer eligibility
Except as otherwise provided in this subchapter, a producer shall not be denied insurance under this subchapter if—
(1) for purposes of catastrophic risk protection coverage, the producer is a "person" (as defined by the Secretary); and
(2) for purposes of any other plan of insurance, the producer is 18 years of age and has a bona fide insurable interest in a crop as an owner-operator, landlord, tenant, or sharecropper.
(Feb. 16, 1938, ch. 30, title V, §520, as added
Editorial Notes
Codification
Amendments
2008—
1994—
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date of 1994 Amendment
Amendment by
§1521. Ineligibility for catastrophic risk and noninsured assistance payments
If the Secretary determines that a person has knowingly adopted a material scheme or device to obtain catastrophic risk, additional coverage, or noninsured assistance benefits under this subchapter to which the person is not entitled, has evaded this subchapter, or has acted with the purposes of evading this subchapter, the person shall be ineligible to receive all benefits applicable to the crop year for which the scheme or device was adopted.
(Feb. 16, 1938, ch. 30, title V, §521, as added
Editorial Notes
Codification
Amendments
2008—
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date
Section effective Oct. 13, 1994, and applicable to provision of crop insurance under Federal Crop Insurance Act (
§1522. Research and development
(a) Definition of policy
In this section, the term "policy" means a policy, plan of insurance, provision of a policy or plan of insurance, and related materials.
(b) Reimbursement of research, development, and maintenance costs
(1) Research and development payment
(A) In general
The Corporation shall provide a payment to an applicant for research and development costs in accordance with this subsection.
(B) Reimbursement
(i) In general
An applicant who submits a policy under
(ii) Reasonable costs
For the purpose of reimbursing research and development and maintenance costs under this section, costs of the applicant shall be considered reasonable costs if the costs are based on—
(I) for any employees or contracted personnel, wage rates equal to not more than 2 times the hourly wage rate plus benefits, as provided by the Bureau of Labor Statistics for the year in which such costs are incurred, calculated using the formula applied to an applicant by the Corporation in reviewing proposed project budgets under this section on October 1, 2016; and
(II) other actual documented costs incurred by the applicant.
(2) Advance payments
(A) In general
Subject to the other provisions of this paragraph, the Board may approve the request of an applicant for advance payment of a portion of reasonable research and development costs prior to submission and approval of the policy by the Board under
(B) Procedures
The Board shall establish procedures for approving advance payment of reasonable research and development costs to applicants.
(C) Concept proposal
As a condition of eligibility for advance payments, an applicant shall submit a concept proposal for the policy that the applicant plans to submit to the Board under
(i) a summary of the qualifications of the applicant, including any prior concept proposals and submissions to the Board under
(ii) a projection of total research and development costs that the applicant expects to incur;
(iii) a description of the need for the policy, the marketability of and expected demand for the policy among affected producers, and the potential impact of the policy on producers and the crop insurance delivery system;
(iv) a summary of data sources available to demonstrate that the policy can reasonably be developed and actuarially appropriate rates established; and
(v) an identification of the risks the proposed policy will cover and an explanation of how the identified risks are insurable under this subchapter.
(D) Review
(i) Experts
If the requirements of subparagraph (B) and (C) are met, the Board may submit a concept proposal described in subparagraph (C) to not less than 2 independent expert reviewers, whose services are appropriate for the type of concept proposal submitted, to assess the likelihood that the proposed policy being developed will result in a viable and marketable policy, as determined by the Board.
(ii) Timing
The time frames described in subparagraphs (C) and (D) of
(E) Approval
(i) In general
The Board may approve up to 50 percent of the projected total research and development costs to be paid in advance to an applicant, in accordance with the procedures developed by the Board for the making of the payments, if, after consideration of the reviewer reports described in subparagraph (D) and such other information as the Board determines appropriate, the Board determines that—
(I) the concept, in good faith, will likely result in a viable and marketable policy consistent with
(II) at the sole discretion of the Board, the concept, if developed into a policy and approved by the Board, would provide crop insurance coverage—
(aa) in a significantly improved form;
(bb) to a crop or region not traditionally served by the Federal crop insurance program; or
(cc) in a form that addresses a recognized flaw or problem in the program;
(III) the applicant agrees to provide such reports as the Corporation determines are necessary to monitor the development effort;
(IV) the proposed budget and timetable are reasonable, as determined by the Board; and
(V) the concept proposal meets any other requirements that the Board determines appropriate.
(ii) Waiver
The Board may waive the 50-percent limitation and, upon request of the submitter after the submitter has begun research and development activities, the Board may approve an additional 25 percent advance payment to the submitter for research and development costs, if, at the sole discretion of the Board, the Board determines that—
(I) the intended policy or plan of insurance developed by the submitter will provide coverage for a region or crop that is underserved by the Federal crop insurance program, including specialty crops; and
(II) the submitter is making satisfactory progress towards developing a viable and marketable policy or plan of insurance consistent with
(F) Submission of policy
If the Board approves an advanced payment under subparagraph (E), the Board shall establish a date by which the applicant shall present a submission in compliance with
(G) Final payment
(i) Approved policies
If a policy is submitted under subparagraph (F) and approved by the Board under
(ii) Policies not approved
If a policy is submitted under subparagraph (F) and is not approved by the Board under
(I) not seek a refund of any payments made in accordance with this paragraph; and
(II) not make any further research and development cost payments associated with the submission of the policy under this paragraph.
(H) Policy not submitted
If an applicant receives an advance payment and fails to fulfill the obligation of the applicant to the Board by not submitting a completed submission without just cause and in accordance with the procedures established under subparagraph (B)) 1, including notice and reasonable opportunity to respond, as determined by the Board, the applicant shall return to the Board the amount of the advance plus interest.
(I) Repeated submissions
The Board may prohibit advance payments to applicants who have submitted—
(i) a concept proposal or submission that did not result in a marketable product; or
(ii) a concept proposal or submission of poor quality.
(J) Continued eligibility
A determination that an applicant is not eligible for advance payments under this paragraph shall not prevent an applicant from reimbursement under paragraph (1)(B).
(K) Waiver for hemp
The Board may waive the viability and marketability requirements under this paragraph in the case of research and development relating to a policy to insure the production of hemp.
(3) Marketability
(A) In general
Subject to subparagraph (B), the Corporation shall approve a reimbursement under paragraph (1) only after determining that the policy is marketable based on a reasonable marketing plan, as determined by the Board.
(B) Waiver for hemp
The Corporation may waive the marketability requirement under subparagraph (A) in the case of research and development relating to a policy to insure the production of hemp.
(4) Maintenance payments
(A) Requirement
The Corporation shall reimburse maintenance costs associated with the annual cost of underwriting for a policy described in paragraph (1).
(B) Duration
Payments with respect to maintenance costs may be provided for a period of not more than four reinsurance years subsequent to Board approval for payment under this subsection.
(C) Options for maintenance
On the expiration of the 4-year period described in subparagraph (B), the applicant responsible for maintenance of the policy may—
(i) maintain the policy and charge a fee to approved insurance providers that elect to sell the policy under this subsection; or
(ii) transfer responsibility for maintenance of the policy to the Corporation.
(D) Fee
(i) Amount
Subject to approval by the Board, the amount of the fee that is payable by an approved insurance provider that elects to sell the policy shall be an amount that is determined by the applicant maintaining the policy.
(ii) Approval
The Board shall approve the amount of a fee determined under clause (i) for maintenance of the policy unless the Board determines that the amount of the fee—
(I) is unreasonable in relation to the maintenance costs associated with the policy; or
(II) unnecessarily inhibits the use of the policy.
(iii) Review
After the Board approves the amount of a fee under clause (ii), the fee shall remain in effect and not be reviewed by the Board unless—
(I) the applicant petitions the Board for reconsideration of the fee;
(II) a substantial change is made to the policy, as determined by the Board; or
(III) there is substantial evidence that the fee is inhibiting sales or use of the policy, as determined by the Board.
(5) Treatment of payment
Payments made under this subsection for a policy shall be considered as payment in full by the Corporation for the research and development conducted with regard to the policy and any property rights to the policy.
(6) Reimbursement amount
The Corporation shall determine the amount of the payment under this subsection for an approved policy based on the complexity of the policy and the size of the area in which the policy or material is expected to be sold.
(c) Research and development authority
(1) Authority
The Corporation may conduct activities or enter into contracts to carry out research and development to maintain or improve existing policies or develop new policies to—
(A) increase participation in States in which the Corporation determines that—
(i) there is traditionally, and continues to be, a low level of Federal crop insurance participation and availability; and
(ii) the State is underserved by the Federal crop insurance program;
(B) increase participation in areas that are underserved by the Federal crop insurance program; and
(C) increase participation by producers of underserved agricultural commodities, including specialty crops.
(2) Underserved agricultural commodities and areas
(A) Authority
The Corporation may conduct research and development or enter into contracts under procedures prescribed by the Corporation with qualified persons to carry out research and development for policies that promote the purposes of paragraph (1).
(B) Consultation
Before conducting research and development or entering into a contract under subparagraph (A), the Corporation shall consult with groups representing producers of agricultural commodities that would be served by the policies that are the subject of the research and development.
(3) Qualified persons
A person with experience in crop insurance or farm or ranch risk management (including a college or university, an approved insurance provider, and a trade or research organization), as determined by the Corporation, shall be eligible to enter into a contract with the Corporation under this subsection.
(4) Types of contracts
A contract under this subsection may provide for research and development regarding new or expanded policies, including policies based on adjusted gross income, cost-of-production, quality losses, and an intermediate base program with a higher coverage and cost than catastrophic risk protection.
(5) Use of resulting policies
The Corporation may offer any policy developed under this subsection that is approved by the Board after expert review in accordance with
(6) Research and development priorities
The Corporation shall establish as one of the highest research and development priorities of the Corporation the development of policies that increase participation by producers of underserved agricultural commodities, including sweet sorghum, biomass sorghum, rice, peanuts, sugarcane, alfalfa, pennycress, dedicated energy crops, and specialty crops.
(7) Whole farm diversified risk management insurance plan
(A) In general
Unless the Corporation approves a whole farm insurance plan, similar to the plan described in this paragraph, to be available to producers for the 2016 reinsurance year, the Corporation shall conduct activities or enter into contracts to carry out research and development to develop a whole farm risk management insurance plan, with a liability limitation of $1,500,000, that allows a diversified crop or livestock producer the option to qualify for an indemnity if actual gross farm revenue is below 85 percent of the average gross farm revenue or the expected gross farm revenue that can reasonably be expected of the producer, as determined by the Corporation.
(B) Eligible producers
The Corporation shall permit producers (including direct-to-consumer marketers and producers servicing local and regional and farm identity-preserved markets) who produce multiple agricultural commodities, including specialty crops, industrial crops, livestock, and aquaculture products, to participate in the plan developed under subparagraph (A) in lieu of any other plan under this subchapter.
(C) Diversification
The Corporation may provide diversification-based additional coverage payment rates, premium discounts, or other enhanced benefits in recognition of the risk management benefits of crop and livestock diversification strategies for producers that—
(i) grow multiple crops; or
(ii) may have income from the production of livestock that uses a crop grown on the farm.
(D) Market readiness
The Corporation may include coverage for the value of any packing, packaging, or any other similar on-farm activity the Corporation determines to be the minimum required in order to remove the commodity from the field.
(E) Review of modifications to improve effectiveness
(i) In general
Not later than 18 months after December 20, 2018—
(I) the Corporation shall hold stakeholder meetings to solicit producer and agent feedback; and
(II) the Board shall—
(aa) review procedures and paperwork requirements on agents and producers; and
(bb) modify procedures and requirements, as appropriate, to decrease burdens and increase flexibility and effectiveness.
(ii) Factors
In carrying out items (aa) and (bb) of subclause (i)(II), the Board shall consider—
(I) removing caps on nursery and livestock production;
(II) allowing a waiver to expand operations, especially for small and beginning farmers;
(III) minimizing paperwork for producers and agents;
(IV) implementing an option for producers with less than $1,000,000 in gross revenue that requires significantly less paperwork and recordkeeping;
(V) developing and using alternative records such as time-stamped photographs or technology applications to document planting and production history;
(VI) treating the different growth stages of aquaculture species as separate crops to recognize the difference in perils at different phases of growth;
(VII) moderating the impacts of disaster years on historic revenue, such as—
(aa) using an average of the historic and projected revenue;
(bb) counting indemnities as historic revenue for loss years;
(cc) counting payments under
(dd) using an assigned yield floor similar to the limitation described in
(VIII) improving agent training and outreach to underserved regions and sectors such as small dairy farms; and
(IX) providing coverage and indemnification of insurable losses—
(aa) after the losses exceed the deductible; and
(bb) up to the maximum amount of total coverage.
(F) Beginning farmer or rancher defined
Notwithstanding
(8) Relation to limitations
A policy developed under this subsection may be prepared without regard to the limitations of this subchapter, including—
(A) the requirement concerning the levels of coverage and rates; and
(B) the requirement that the price level for each insured agricultural commodity must equal the expected market price for the agricultural commodity, as established by the Board.
(9) Tropical storm or hurricane insurance
(A) In general
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding a policy to insure crops (including tomatoes, peppers, and citrus) against losses due to a tropical storm or hurricane.
(B) Research and development
Research and development under subparagraph (A) shall—
(i) evaluate the effectiveness of risk management tools for a low frequency and catastrophic loss weather event; and
(ii) result in a policy that provides protection for at least 1 of the following:
(I) Production loss.
(II) Revenue loss.
(C) Report
Not later than 1 year after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes—
(i) the results of the research and development carried out under this paragraph; and
(ii) any recommendations with respect to those results.
(10) Quality loss
(A) In general
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding the establishment of each of the following alternative methods of adjusting for quality losses:
(i) A method that does not impact the actual production history of a producer.
(ii) A method that provides that, in circumstances in which a producer has suffered a quality loss to the insured crop of the producer that is insufficient to trigger an indemnity payment, the producer may elect to exclude that quality loss from the actual production history of the producer.
(iii) 1 or more methods that combine the methods described in clauses (i) and (ii).
(B) Requirements
Notwithstanding subsections (g) and (m) of
(i) optional for a producer to use; and
(ii) offered at an actuarially sound premium rate.
(C) Report
Not later than 1 year after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes—
(i) the results of the research and development carried out under subparagraph (A); and
(ii) any recommendations with respect to those results.
(11) Citrus
(A) In general
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding the insurance of citrus fruit commodities and commodity types, including research and development of—
(i) improvements to 1 or more existing policies, including the whole-farm revenue protection pilot policy;
(ii) alternative methods of insuring revenue for citrus fruit commodities and commodity types; and
(iii) the development of new, or expansion of existing, revenue policies for citrus fruit commodities and commodity types.
(B) Report
Not later than 1 year after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes—
(i) the results of the research and development carried out under subparagraph (A); and
(ii) any recommendations with respect to those results.
(12) Hops
(A) In general
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding a policy to insure the production of hops or revenue derived from the production of hops.
(B) Report
Not later than 1 year after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes—
(i) the results of the research and development carried out under subparagraph (A); and
(ii) any recommendations with respect to those results.
(13) Subsurface irrigation practices
(A) In general
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding the creation of a separate practice for subsurface irrigation, including the establishment of a separate transitional yield within a county that is reflective of the average gain in productivity and yield associated with the installation of a subsurface irrigation system.
(B) Report
Not later than 18 months after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes—
(i) the results of the research and development carried out under subparagraph (A); and
(ii) any recommendations with respect to those results.
(14) Grain sorghum
(A) In general
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development—
(i) regarding improvements to 1 or more policies to insure irrigated grain sorghum;
(ii) regarding alternative methods for producers with not more than 4 years of production history to insure irrigated grain sorghum; and
(iii) to assess, by county, the difference in the rate, average yield, and coverage level of grain sorghum policies compared to policies for other feed grains in that county.
(B) Report
Not later than 18 months after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes—
(i) the results of the research and development carried out under subparagraph (A); and
(ii) any recommendations with respect to those results.
(15) Limited irrigation practices
(A) Authority
The Corporation shall—
(i) consider expanding the availability of the limited irrigation insurance program to neighboring and similarly situated States (such as the States of Colorado and Nebraska), as determined by the Secretary;
(ii) carry out research, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research, on the marketability of the existing limited irrigation insurance program; and
(iii) make recommendations on how to improve participation in that program.
(B) Research
In carrying out research under subparagraph (A), a qualified person shall—
(i) collaborate with researchers on the subjects of—
(I) reduced irrigation practices or limited irrigation practices; and
(II) expected yield reductions following the application of reduced irrigation;
(ii) collaborate with State and Federal officials responsible for the collection of water and the regulation of water use for the purpose of irrigation;
(iii) provide recommendations to encourage producers to carry out limited irrigation practices or reduced irrigation and water conservation practices; and
(iv) develop web-based applications that will streamline access to coverage for producers electing to conserve water use on irrigated crops.
(C) Report
Not later than 18 months after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes—
(i) the results of the research carried out under subparagraphs (A) and (B);
(ii) any recommendations to encourage producers to carry out limited irrigation practices or reduced irrigation and water conservation practices; and
(iii) the actions taken by the Corporation to carry out the recommendations described in clause (ii).
(16) Insurable irrigation practices for rice
(A) In general
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, to include new and innovative irrigation practices under the current rice policy or the development of a distinct policy endorsement rated for rice produced using—
(i) alternate wetting and drying practices (also referred to as "intermittent flooding"); and
(ii) furrow irrigation practices.
(B) Report
Not later than 18 months after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes—
(i) the results of the research and development carried out under paragraph (1); and
(ii) any recommendations with respect to those results.
(17) Greenhouse policy
(A) In general
(i) Research and development
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding a policy to insure in a controlled environment such as a greenhouse—
(I) the production of floriculture, nursery, and bedding plants;
(II) the establishment of cuttings or tissue culture in a growing medium; or
(III) other similar production, as determined by the Secretary.
(ii) Availability of policy
Notwithstanding the last sentence of
(B) Research and development described
Research and development described in subparagraph (A)(i) shall evaluate the effectiveness of policies for the production of plants in a controlled environment, including policies that—
(i) are based on the risk of—
(I) plant diseases introduced from the environment;
(II) contaminated cuttings, seedlings, or tissue culture; or
(III) Federal or State quarantine or destruction orders associated with the contaminated items described in subclause (II);
(ii) consider other causes of loss applicable to a controlled environment, such as a loss of electricity due to weather;
(iii) consider appropriate best practices to minimize the risk of loss;
(iv) consider whether to provide coverage for various types of plants under 1 policy or to provide coverage for 1 species or type of plant per policy;
(v) have streamlined reporting and paperwork requirements that take into account short propagation schedules, variable crop years, and the variety of plants that may be produced in a single facility; and
(vi) provide protection for revenue losses.
(C) Report
Not later than 2 years after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes—
(i) the results of the research and development carried out under subparagraphs (A)(i) and (B); and
(ii) any recommendations with respect to those results.
(18) Local foods
(A) In general
(i) Feasibility study
The Corporation shall carry out a study to determine the feasibility of, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out a study to determine the feasibility of, a policy to insure production—
(I) of floriculture, fruits, vegetables, poultry, livestock, or the products of floriculture, fruits, vegetables, poultry, or livestock; and
(II) that is targeted toward local consumers and markets.
(ii) Availability of policy
Notwithstanding the last sentence of
(I) the results of the feasibility study under clause (i) are viable; and
(II) the requirements of
(B) Feasibility study described
The feasibility study described in subparagraph (A)(i) shall evaluate the effectiveness of policies for production targeted toward local consumers and markets, including policies that—
(i) consider small-scale production in various areas, including urban, suburban, and rural areas;
(ii) consider a variety of marketing strategies;
(iii) allow for production in soil and in alternative systems such as vertical systems, greenhouses, rooftops, or hydroponic systems;
(iv) consider the price premium when accounting for production or revenue losses;
(v) consider whether to provide coverage—
(I) for various types of production under 1 policy; and
(II) for 1 species or type of plant per policy; and
(vi) have streamlined reporting and paperwork requirements.
(C) Report
Not later than 2 years after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that—
(i) examines whether a version of existing policies such as the whole-farm revenue protection insurance plan may be tailored to provide improved coverage for producers of local foods;
(ii) describes the results of the feasibility study carried out under subparagraph (A)(i); and
(iii) includes any recommendations with respect to those results.
(19) High-risk, highly productive batture land policy
(A) In general
(i) Research and development
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding a policy to insure producers of corn, cotton, and soybeans—
(I) with operations on highly productive batture land within the Lower Mississippi River Valley;
(II) that have a history of production of not less than 5 years; and
(III) that have been impacted by more frequent flooding over the past 10 years due to sedimentation or federally constructed engineering improvements.
(ii) Availability of policy
Notwithstanding the last sentence of
(B) Research and development described
Research and development described in subparagraph (A)(i) shall evaluate the feasibility of less cost-prohibitive policies for batture-land producers in high risk areas, including policies that—
(i) consider premium rate adjustments;
(ii) consider automatic yield exclusion for consecutive-year losses; and
(iii) allow for flexibility of final plant dates and prevent plant regulations.
(C) Report
Not later than 2 years after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that—
(i) examines whether a version of existing policies may be tailored to provide improved coverage for batture-land producers;
(ii) describes the results of the research and development carried out under subparagraphs (A) and (B); and
(iii) includes any recommendations with respect to those results.
(d) Partnerships for risk management development and implementation
(1) Purpose
The purpose of this subsection is to authorize the Corporation to enter into partnerships with public and private entities for the purpose of either—
(A) increasing the availability of loss mitigation, financial, and other risk management tools for producers, with a priority given to risk management tools for producers of agricultural commodities covered by
(B) improving analysis tools and technology regarding compliance or identifying and using innovative compliance strategies.
(2) Authority
The Corporation may enter into partnerships with the National Institute of Food and Agriculture, the Agricultural Research Service, the National Oceanic Atmospheric Administration, and other appropriate public and private entities with demonstrated capabilities in developing and implementing risk management and marketing options for producers of specialty crops and underserved agricultural commodities.
(3) Objectives
The Corporation may enter into a partnership under paragraph (2)—
(A) to enhance the notice and timeliness of notice of weather conditions that could negatively affect crop yields, quality, and final product use in order to allow producers to take preventive actions to increase end product profitability and marketability and to reduce the possibility of crop insurance claims;
(B) to develop a multifaceted approach to pest management and fertilization to decrease inputs, decrease environmental exposure, and increase application efficiency;
(C) to develop or improve techniques for planning, breeding, planting, growing, maintaining, harvesting, storing, shipping, and marketing that will address quality and quantity challenges associated with year-to-year and regional variations;
(D) to clarify labor requirements and assist producers in complying with requirements to better meet the physically intense and time-compressed planting, tending, and harvesting requirements associated with the production of specialty crops and underserved agricultural commodities;
(E) to provide assistance to State foresters or equivalent officials for the prescribed use of burning on private forest land for the prevention, control, and suppression of fire;
(F) to provide producers with training and informational opportunities so that the producers will be better able to use financial management, farm financial benchmarking, crop insurance, marketing contracts, and other existing and emerging risk management tools;
(G) to improve analysis tools and technology regarding compliance or identifying and using innovative compliance strategies; and
(H) to develop other risk management tools to further increase economic and production stability.
(e) Funding
(1) Reimbursements
Of the amounts made available from the insurance fund established under
(2) Contracting
(A) Conducting and contracting for research and development
Of the amounts made available from the insurance fund established under
(i) $12,500,000 for each of fiscal years 2008 through 2018; and
(ii) $8,000,000 for fiscal year 2019 and each fiscal year thereafter.
(B) Underserved States
Of the amount made available under subparagraph (A) for a fiscal year, the Corporation shall use not more than $5,000,000 for the fiscal year to conduct research and development and carry out contracting for research and development to carry out the purpose described in subsection (c)(1)(A).
(3) Unused funding
If the Corporation determines that the amount available under this section for a fiscal year is not needed for such purposes, the Corporation may use—
(A) not more than $5,000,000 for each fiscal year to improve program integrity, including by—
(i) increasing compliance-related training;
(ii) improving analysis tools and technology regarding compliance;
(iii) use of information technology, as determined by the Corporation; and
(iv) identifying and using innovative compliance strategies; and
(B) any excess amounts to carry out other activities authorized under this section.
(Feb. 16, 1938, ch. 30, title V, §522, as added
Editorial Notes
Codification
Amendments
2018—Subsec. (b)(1)(B).
Subsec. (b)(2)(K).
Subsec. (b)(3).
Subsec. (b)(4)(C).
Subsec. (b)(4)(D)(i).
Subsec. (b)(4)(D)(iii).
Subsec. (c)(7) to (24).
Subsec. (e)(2)(A).
2014—Subsec. (b)(2)(E).
Subsec. (b)(4)(A).
Subsec. (c).
Subsec. (c)(1).
Subsec. (c)(2)(A).
Subsec. (c)(2)(B).
Subsec. (c)(5).
Subsec. (c)(6).
Subsec. (c)(10) to (16).
Subsec. (c)(17) to (24).
Subsec. (c)(25).
Subsec. (d)(1).
Subsec. (d)(3)(F).
Subsec. (d)(3)(G), (H).
Subsec. (e)(1).
Subsec. (e)(2)(A).
Subsec. (e)(2)(B).
Subsec. (e)(3).
Subsec. (e)(4).
2008—Subsec. (b)(1), (2).
Subsec. (b)(2)(C)(v).
Subsec. (b)(3).
Subsec. (b)(4)(A).
Subsec. (c)(10) to (16).
Subsec. (c)(17).
Subsec. (d)(2).
Subsec. (e)(1).
Subsec. (e)(2)(A).
Subsec. (e)(3).
Subsec. (e)(4).
Statutory Notes and Related Subsidiaries
Effective Date of 2018 Amendment
"(1)
"(2)
Effective Date of 2008 Amendment
Amendment of this section and repeal of
[
Effective Date
Section effective Oct. 1, 2000, see section 171(b)(1)(A) of
Reimbursement Regulations
"(a) Not later than August 1, 2001, the Federal Crop Insurance Corporation shall promulgate final regulations to carry out section 522(b) of the Federal Crop Insurance Act (
"(1) the notice and comment provisions of
"(2) the Statement of Policy of the Secretary of Agriculture effective July 24, 1971 (36 Fed. Reg. 13804), relating to notices of proposed rulemaking and public participation in rulemaking; and
"(3)
"(b) In carrying out this section, the Corporation shall use the authority provided under
"(c) The final regulations promulgated under subsection (a) shall take effect on the date of publication of the final regulations."
1 So in original. The second closing parenthesis probably should not appear.
§1523. Pilot programs
(a) General provisions
(1) Authority
Except as otherwise provided in this section, the Corporation may, at the sole discretion of the Corporation, conduct a pilot program submitted to and approved by the Board under
(2) Private coverage
Under this section, the Corporation shall not conduct any pilot program that provides insurance protection against a risk if insurance protection against the risk is generally available from private companies.
(3) Covered activities
The pilot programs described in paragraph (1) may include pilot programs providing insurance protection against losses involving—
(A) reduced forage on rangeland caused by drought or insect infestation;
(B) livestock poisoning and disease;
(C) destruction of bees due to the use of pesticides;
(D) unique special risks related to fruits, nuts, vegetables, and specialty crops in general, aquacultural species, and forest industry needs (including appreciation);
(E) after October 1, 2001, wild salmon, except that—
(i) any pilot program with regard to wild salmon may be carried out without regard to the limitations of this subchapter; and
(ii) the Corporation shall conduct all wild salmon programs under this subchapter so that, to the maximum extent practicable, all costs associated with conducting the programs are not expected to exceed $1,000,000 for fiscal year 2002 and each subsequent fiscal year.
(4) Scope of pilot programs
The Corporation may—
(A) approve a pilot program under this section to be conducted on a regional, State, or national basis after considering the interests of affected producers and the interests of, and risks to, the Corporation;
(B) operate the pilot program, including any modifications of the pilot program, for a period of up to 4 years;
(C) extend the time period for the pilot program for additional periods, as determined appropriate by the Corporation; and
(D) provide pilot programs that would allow producers—
(i) to receive a reduced premium for using whole farm units or single crop units of insurance; and
(ii) to cross State and county boundaries to form insurable units.
(b) Livestock pilot programs
(1) Definition of livestock
In this subsection, the term "livestock" includes, but is not limited to, cattle, sheep, swine, goats, and poultry.
(2) Programs required
Subject to paragraph (7), the Corporation shall conduct two or more pilot programs to evaluate the effectiveness of risk management tools for livestock producers, including the use of futures and options contracts and policies and plans of insurance that protect the interests of livestock producers and that provide—
(A) livestock producers with reasonable protection from the financial risks of price or income fluctuations inherent in the production and marketing of livestock; or
(B) protection for production losses.
(3) Purpose of programs
To the maximum extent practicable, the Corporation shall evaluate the greatest number and variety of pilot programs described in paragraph (2) to determine which of the offered risk management tools are best suited to protect livestock producers from the financial risks associated with the production and marketing of livestock.
(4) Timing
The Corporation shall begin conducting livestock pilot programs under this subsection during fiscal year 2001.
(5) Relation to other limitations
Any policy or plan of insurance offered under this subsection may be prepared without regard to the limitations of this subchapter.
(6) Assistance
As part of a pilot program under this subsection, the Corporation may provide reinsurance for policies or plans of insurance and subsidize the purchase of futures and options contracts or policies and plans of insurance offered under the pilot program.
(7) Private insurance
No action may be undertaken with respect to a risk under this subsection if the Corporation determines that insurance protection for livestock producers against the risk is generally available from private companies.
(8) Location
The Corporation shall conduct the livestock pilot programs under this subsection in a number of counties that is determined by the Corporation to be adequate to provide a comprehensive evaluation of the feasibility, effectiveness, and demand among producers for the risk management tools evaluated in the pilot programs.
(9) Eligible producers
Any producer of a type of livestock covered by a pilot program under this subsection that owns or operates a farm or ranch in a county selected as a location for that pilot program shall be eligible to participate in that pilot program.
(c) Revenue insurance pilot program
(1) In general
Subject to
(2) Administration
Revenue insurance under this subsection shall—
(A) be offered through reinsurance arrangements with private insurance companies;
(B) offer at least a minimum level of coverage that is an alternative to catastrophic crop insurance;
(C) be actuarially sound; and
(D) require the payment of premiums and administrative fees by an insured producer.
(d) Premium rate reduction pilot program
(1) Purpose
The purpose of the pilot program established under this subsection is to determine whether approved insurance providers will compete to market policies or plans of insurance with reduced rates of premium, in a manner that maintains the financial soundness of approved insurance providers and is consistent with the integrity of the Federal crop insurance program.
(2) Establishment
(A) In general
Beginning with the 2002 crop year, the Corporation shall establish a pilot program under which approved insurance providers may propose for approval by the Board policies or plans of insurance with reduced rates of premium—
(i) for one or more agricultural commodities; and
(ii) within a limited geographic area, as proposed by the approved insurance provider and approved by the Board.
(B) Determination by Board
The Board shall approve a policy or plan of insurance proposed under this subsection that involves a premium reduction if the Board determines that—
(i) the interests of producers are adequately protected within the pilot area;
(ii) rates of premium are actuarially appropriate, as determined by the Board;
(iii) the size of the proposed pilot area is adequate;
(iv) the proposed policy or plan of insurance would not unfairly discriminate among producers within the proposed pilot area;
(v) if the proposed policy or plan of insurance were available in a geographic area larger than the proposed pilot area, the proposed policy or plan of insurance would—
(I) not have a significant adverse impact on the crop insurance delivery system;
(II) not result in a reduction of program integrity;
(III) be actuarially appropriate; and
(IV) not place an additional financial burden on the Federal Government; and
(vi) the proposed policy or plan of insurance meets other requirements of this subchapter determined appropriate by the Board.
(C) Time limitations and procedures
The time limitations and procedures of the Board established under
(e) Adjusted gross revenue insurance pilot program
(1) In general
The Corporation shall carry out, through at least the 2004 reinsurance year, the adjusted gross revenue insurance pilot program in effect for the 2002 reinsurance year.
(2) Additional counties
(A) In general
In addition to counties otherwise included in the pilot program, the Corporation shall include in the pilot program for the 2003 reinsurance year at least 8 counties in the State of California and at least 8 counties in the State of Pennsylvania.
(B) Selection criteria
In carrying out subparagraph (A), the Corporation shall work with the respective State Departments of Agriculture to establish criteria to determine which counties to include in the pilot program.
(f) Camelina pilot program
(1) In general
The Corporation shall establish a pilot program under which producers or processors of camelina may propose for approval by the Board policies or plans of insurance for camelina, in accordance with
(2) Determination by Board
The Board shall approve a policy or plan of insurance proposed under paragraph (1) if, as determined by the Board, the policy or plan of insurance—
(A) protects the interests of producers;
(B) is actuarially sound; and
(C) meets the requirements of this subchapter.
(3) Timeframe
The Corporation shall commence the camelina insurance pilot program as soon as practicable after the date of enactment of this subsection.
(g) Sesame insurance pilot program
(1) In general
In addition to any other authority of the Corporation, the Corporation shall establish and carry out a pilot program under which a producer of nondehiscent sesame under contract may elect to obtain multiperil crop insurance, as determined by the Corporation.
(2) Terms and conditions
The multiperil crop insurance offered under the sesame insurance pilot program shall—
(A) be offered through reinsurance arrangements with private insurance companies;
(B) be actuarially sound; and
(C) require the payment of premiums and administrative fees by a producer obtaining the insurance.
(3) Location
The sesame insurance pilot program shall be carried out only in the State of Texas.
(4) Duration
The Corporation shall commence the sesame insurance pilot program as soon as practicable after the date of the enactment of this subsection.
(h) Grass seed insurance pilot program
(1) In general
In addition to any other authority of the Corporation, the Corporation shall establish and carry out a grass seed pilot program under which a producer of Kentucky bluegrass or perennial rye grass under contract may elect to obtain multiperil crop insurance, as determined by the Corporation.
(2) Terms and conditions
The multiperil crop insurance offered under the grass seed insurance pilot program shall—
(A) be offered through reinsurance arrangements with private insurance companies;
(B) be actuarially sound; and
(C) require the payment of premiums and administrative fees by a producer obtaining the insurance.
(3) Location
The grass seed insurance pilot program shall be carried out only in each of the States of Minnesota and North Dakota.
(4) Duration
The Corporation shall commence the grass seed insurance pilot program as soon as practicable after the date of the enactment of this subsection.
(i) Underserved crops and regions pilot programs
(1) Definition of livestock commodity
In this subsection, the term "livestock commodity" includes cattle, sheep, swine, goats, and poultry, including pasture, rangeland, and forage as a source of feed for that livestock.
(2) Authorization
Notwithstanding subsection (a)(2), the Corporation may conduct 2 or more pilot programs to provide producers of underserved specialty crops and livestock commodities with index-based weather insurance, subject to the requirements of this section.
(3) Review and approval of submissions
(A) In general
The Board shall approve 2 or more proposed policies or plans of insurance from approved insurance providers if the Board determines that the policies or plans provide coverage as specified in paragraph (2), and meet the conditions described in this paragraph.
(B) Requirements
To be eligible for approval under this subsection, the approved insurance provider shall have—
(i) adequate experience underwriting and administering policies or plans of insurance that are comparable to the proposed policy or plan of insurance;
(ii) sufficient assets or reinsurance to satisfy the underwriting obligations of the approved insurance provider, and possess a sufficient insurance credit rating from an appropriate credit rating bureau, in accordance with Board procedures; and
(iii) applicable authority and approval from each State in which the approved insurance provider intends to sell the insurance product.
(C) Review requirements
In reviewing applications under this subsection, the Board shall conduct the review in a manner consistent with the standards, rules, and procedures for policies or plans of insurance submitted under
(D) Prioritization
The Board shall prioritize applications that provide a new kind of coverage for specialty crops and livestock commodities that previously had no available crop insurance, or has demonstrated a low level of participation under existing coverage.
(4) Payment of premium support
(A) In general
The Corporation shall pay a portion of the premium for producers that purchase a policy or plan of insurance approved pursuant to this subsection.
(B) Amount
The premium subsidy shall provide a similar dollar amount of premium subsidy per acre that the Corporation pays for comparable policies or plans of insurance reinsured under this subchapter, except that in no case shall the premium subsidy exceed 60 percent of total premium, as determined by the Corporation.
(C) Calculation
The premium subsidy, as determined by the Corporation, shall be calculated as—
(i) a percentage of premium;
(ii) a percentage of expected loss determined pursuant to a reasonable actuarial methodology; or
(iii) a fixed dollar amount per acre.
(D) Payment
Subject to subparagraphs (B) and (C), the premium subsidy under this subsection shall be paid by the Corporation in the same manner and under the same terms and conditions as premium subsidy for other policies and plans of insurance.
(E) Operating and administrative expense payments
(i) In general
Subject to clause (ii), operating and administrative expense payments may be made for policies and plans of insurance approved under this subsection in an amount that is commensurate with similar policies and plans of insurance reinsured under this subchapter, on the condition that the operating and administrative expenses are not included in premiums.
(ii) Limitation
Subject to subparagraph (F)(i), Federal reinsurance, research and development costs, other reimbursements, or maintenance fees shall not be provided or collected for policies and plans of insurance approved under this subsection.
(F) Approved insurance providers
Any policy or plan of insurance approved under this subsection may be sold only by the approved insurance provider that submits the application and by any additional approved insurance provider that—
(i) agrees to pay maintenance fees or other payments to the approved insurance provider that submitted the application in an amount agreed to by the applicant and the additional approved insurance provider, on the condition that the fees or payments shall be reasonable and appropriate to ensure that the policies or plans of insurance may be made available by additional approved insurance providers; and
(ii) meets the eligibility criteria of paragraph (3)(B), as determined by the Board.
(G) Relationship to other provisions
The requirements of this paragraph shall apply notwithstanding paragraph (6).
(5) Oversight
The Corporation shall develop and publish procedures to administer policies or plans of insurance approved under this subsection that—
(A) require each approved insurance provider to report sales, acreage and claim data, and any other data that the Corporation determines to be appropriate, to allow the Corporation to evaluate sales and performance of the product; and
(B) contain such other requirements as the Corporation determines necessary to ensure that the products—
(i) do not have a significant adverse impact on the crop insurance delivery system;
(ii) are in the best interests of producers; and
(iii) do not result in a reduction of program integrity.
(6) Confidentiality
(A) In general
All reports required under paragraph (5) and all other proprietary information and data generated or derived from applicants under this subsection shall be considered to be confidential commercial or financial information for the purposes of
(B) Standard
If information concerning a proposal could be withheld by the Secretary under the standard for privileged or confidential information pertaining to trade secrets and commercial or financial information under
(7) Ineligible purposes
In no case shall a policy or plan of insurance made available under this subsection provide coverage substantially similar to privately available hail insurance.
(8) Funding
(A) Limitation on expenditures
Notwithstanding any other provision in this subsection, of the funds of the Corporation, the Corporation shall use to carry out this section not more than $12,500,000 for each of fiscal years 2015 through 2018, to remain available until expended.
(B) Relation to other programs
The amount of funds made available under this section shall be in addition to amounts made available under other provisions of this subchapter, including amounts made available under subsection (b).
(Feb. 16, 1938, ch. 30, title V, §523, as added
Editorial Notes
References in Text
The date of enactment of this subsection, referred to in subsecs. (f)(3), (g)(4), and (h)(4), is the date of enactment of
Codification
Amendments
2018—Subsec. (b)(10).
Subsec. (i)(3)(A).
2014—Subsec. (a)(1).
Subsec. (a)(5).
Subsec. (i).
2008—Subsecs. (a), (b), (d).
Subsec. (f).
Subsecs. (g), (h).
2002—Subsec. (e).
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Effective Date
Section effective Oct. 1, 2000, see section 171(b)(1)(A) of
1 See References in Text note below.
§1524. Education and risk management assistance
(a) Education assistance
(1) In general
Subject to the amounts made available under paragraph (4), the Secretary, acting through the National Institute of Food and Agriculture, shall carry out the program established under paragraph (2).
(2) Partnerships for risk management education
(A) Authority
The Secretary, acting through the National Institute of Food and Agriculture, shall establish a program under which competitive grants are made to qualified public and private entities (including land grant colleges, cooperative extension services, and colleges or universities), as determined by the Secretary, for the purpose of educating agricultural producers and providing technical assistance to agricultural producers on a full range of farm viability and risk management activities, including futures, options, agricultural trade options, crop insurance, business planning, enterprise analysis, transfer and succession planning, management coaching, market assessment, cash flow analysis, cash forward contracting, debt reduction, production diversification, farm resources risk reduction, farm financial benchmarking, conservation activities, and other risk management strategies.
(B) Basis for grants
A grant under this paragraph shall be awarded on the basis of merit and shall be subject to peer or merit review.
(C) Obligation period
Funds for a grant under this paragraph shall be available to the Secretary for obligation for a 2-year period.
(D) Administrative costs
The Secretary may use not more than 4 percent of the funds made available for grants under this paragraph for administrative costs incurred by the Secretary in carrying out this paragraph.
(3) Requirements
In carrying out the program established under paragraph (2), the Secretary shall place special emphasis on farm viability and risk management strategies (including farm financial benchmarking, business planning and technical assistance, market assessment, transfer and succession planning, and crop insurance participation), education, and outreach specifically targeted at—
(A) beginning farmers or ranchers;
(B) legal immigrant farmers or ranchers that are attempting to become established producers in the United States;
(C) socially disadvantaged farmers or ranchers;
(D) farmers or ranchers that—
(i) are preparing to retire;
(ii) are using transition strategies to help new farmers or ranchers get started; 1
(iii) are converting production and marketing systems to pursue new markets; and 2
(E) producers that are underserved by the Federal crop insurance program established under this subchapter, as determined by the Corporation; and
(F) veteran farmers or ranchers.
(4) Funding
From the insurance fund established under
(b) Agricultural management assistance
(1) Authority
The Secretary shall provide financial assistance to producers in the States of Connecticut, Delaware, Hawaii, Maryland, Massachusetts, Maine, Nevada, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Utah, Vermont, West Virginia, and Wyoming.
(2) Uses
A producer may use financial assistance provided under this subsection to—
(A) construct or improve—
(i) watershed management structures; or
(ii) irrigation structures;
(B) plant trees to form windbreaks or to improve water quality;
(C) mitigate financial risk through production or marketing diversification or resource conservation practices, including—
(i) soil erosion control;
(ii) integrated pest management;
(iii) organic farming; or
(iv) to develop and implement a plan to create marketing opportunities for the producer, including through value-added processing;
(D) enter into futures, hedging, or options contracts in a manner designed to help reduce production, price, or revenue risk;
(E) enter into agricultural trade options as a hedging transaction to reduce production, price, or revenue risk; or
(F) conduct any other activity relating to an activity described in subparagraphs (A) through (E), as determined by the Secretary.
(3) Payment limitation
The total amount of payments made to a person (as defined in section 1308(5) 3 of this title) (before the amendment made by section 1603(a) 3 of the Food, Conservation, and Energy Act of 2008) under this subsection for any year may not exceed $50,000.
(4) Commodity Credit Corporation
(A) In general
The Secretary shall carry out this subsection through the Commodity Credit Corporation.
(B) Funding
(i) In general
Except as provided in clause (ii), the Commodity Credit Corporation shall make available to carry out this subsection not less than $10,000,000 for each fiscal year.
(ii) Exception for certain fiscal years
For each of fiscal years 2008 through 2014, the Commodity Credit Corporation shall make available to carry out this subsection $15,000,000.
(C) Certain uses
Of the amounts made available to carry out this subsection for a fiscal year, the Commodity Credit Corporation shall use not less than—
(i) 50 percent to carry out subparagraphs (A), (B), and (C) of paragraph (2) through the Natural Resources Conservation Service;
(ii) 10 percent to provide organic certification cost share assistance through the Agricultural Marketing Service; and
(iii) 40 percent to conduct activities to carry out subparagraph (F) of paragraph (2) through the Risk Management Agency.
(Feb. 16, 1938, ch. 30, title V, §524, as added
Editorial Notes
References in Text
Codification
Amendments
2018—Subsec. (a)(1).
Subsec. (a)(2).
"(A) there is traditionally, and continues to be, a low level of Federal crop insurance participation and availability; and
"(B) producers are underserved by the Federal crop insurance program."
Subsec. (a)(2)(A).
Subsec. (a)(3).
Subsec. (a)(3)(D)(iii), (E).
Subsec. (a)(3)(F).
Subsec. (a)(4).
2014—Subsec. (a)(3)(A).
Subsec. (a)(4).
Subsec. (b)(3).
2011—Subsec. (b)(4)(B)(ii).
2008—Subsec. (a)(1).
Subsec. (a)(1)(B), (3)(A).
Subsec. (a)(4), (5).
Subsec. (b)(1).
Subsec. (b)(3).
Subsec. (b)(4)(B)(i).
Subsec. (b)(4)(B)(ii), (iii).
Subsec. (b)(4)(C).
2004—Subsec. (b)(4)(B)(i).
Subsec. (b)(4)(B)(iii).
2002—Subsec. (b).
"(1)
"(2)
"(A) construct or improve—
"(i) watershed management structures; or
"(ii) irrigation structures;
"(B) plant trees to form windbreaks or to improve water quality;
"(C) mitigate financial risk through production diversification or resource conservation practices, including—
"(i) soil erosion control;
"(ii) integrated pest management; or
"(iii) transition to organic farming;
"(D) enter into futures, hedging, or options contracts in a manner designed to help reduce production, price, or revenue risk;
"(E) enter into agricultural trade options as a hedging transaction to reduce production, price, or revenue risk; or
"(F) conduct any other activity related to the activities described in subparagraphs (A) through (E), as determined by the Secretary.
"(2)
"(3)
"(A)
"(B)
Statutory Notes and Related Subsidiaries
Effective Date of 2014 Amendment
Amendment by
Effective Date of 2008 Amendment
Amendment of this section and repeal of
Amendment by section 7511(c)(2) of
Effective Date
Section effective Oct. 1, 2000, see section 171(b)(1)(A) of
1 So in original. Probably should be followed by "and".
2 So in original. The word "and" probably should not appear.
3 See References in Text note below.
SUBCHAPTER II—SUPPLEMENTAL AGRICULTURAL DISASTER ASSISTANCE
§1531. Supplemental agricultural disaster assistance
(a) Definitions
In this section:
(1) Actual production history yield
The term "actual production history yield" means the weighted average of the actual production history for each insurable commodity or noninsurable commodity, as calculated under subchapter I or the noninsured crop disaster assistance program, respectively.
(2) Actual production on the farm
The term "actual production on the farm" means the sum of the value of all crops produced on the farm, as determined under subsection (b)(6)(B).
(3) Adjusted actual production history yield
The term "adjusted actual production history yield" means—
(A) in the case of an eligible producer on a farm that has at least 4 years of actual production history yields for an insurable commodity that are established other than pursuant to
(B) in the case of an eligible producer on a farm that has less than 4 years of actual production history yields for an insurable commodity, of which 1 or more were established pursuant to
(C) in all other cases, the actual production history of the eligible producer on a farm.
(4) Adjusted noninsured crop disaster assistance program yield
The term "adjusted noninsured crop disaster assistance program yield" means—
(A) in the case of an eligible producer on a farm that has at least 4 years of production history under the noninsured crop disaster assistance program that are not replacement yields, the noninsured crop disaster assistance program yield without regard to any replacement yields;
(B) in the case of an eligible producer on a farm that has less than 4 years of production history under the noninsured crop disaster assistance program that are not replacement yields, the noninsured crop disaster assistance program yield as calculated without including the lowest of the replacement yields; and
(C) in all other cases, the production history of the eligible producer on the farm under the noninsured crop disaster assistance program.
(5) Counter-cyclical program payment yield
The term "counter-cyclical program payment yield" means the weighted average payment yield established under—
(A)
(B) section 1102 or 1301(6) of the Food, Conservation, and Energy Act of 2008 (
(C) a successor section.
(6) Crop of economic significance
The term "crop of economic significance" shall have the uniform meaning given the term by the Secretary for purposes of subsections (b)(1)(B) and (g)(6).
(7) Disaster county
(A) In general
The term "disaster county" means a county included in the geographic area covered by a qualifying natural disaster declaration.
(B) Inclusion
The term "disaster county" includes—
(i) a county contiguous to a county described in subparagraph (A); and
(ii) any farm in which, during a calendar year the actual production on the farm is less than 50 percent of the normal production on the farm.
(8) Eligible producer on a farm
(A) In general
The term "eligible producer on a farm" means an individual or entity described in subparagraph (B) that, as determined by the Secretary, assumes the production and market risks associated with the agricultural production of crops or livestock.
(B) Description
An individual or entity referred to in subparagraph (A) is—
(i) a citizen of the United States;
(ii) a resident alien;
(iii) a partnership of citizens of the United States; or
(iv) a corporation, limited liability corporation, or other farm organizational structure organized under State law.
(9) Farm
(A) In general
The term "farm" means, in relation to an eligible producer on a farm, the sum of all crop acreage in all counties that is planted or intended to be planted for harvest for sale or on-farm livestock feeding (including native grassland intended for haying) by the eligible producer.
(B) Aquaculture
In the case of aquaculture, the term "farm" means, in relation to an eligible producer on a farm, all fish being produced in all counties that are intended to be harvested for sale by the eligible producer.
(C) Honey
In the case of honey, the term "farm" means, in relation to an eligible producer on a farm, all bees and beehives in all counties that are intended to be harvested for a honey crop for sale by the eligible producer.
(10) Farm-raised fish
The term "farm-raised fish" means any aquatic species that is propagated and reared in a controlled environment.
(11) Insurable commodity
The term "insurable commodity" means an agricultural commodity (excluding livestock) for which the producer on a farm is eligible to obtain a policy or plan of insurance under subchapter I.
(12) Livestock
The term "livestock" includes—
(A) cattle (including dairy cattle);
(B) bison;
(C) poultry;
(D) sheep;
(E) swine;
(F) horses; and
(G) other livestock, as determined by the Secretary.
(13) Noninsurable commodity
The term "noninsurable commodity" means a crop for which the eligible producers on a farm are eligible to obtain assistance under the noninsured crop assistance program.
(14) Noninsured crop assistance program
The term "noninsured crop assistance program" means the program carried out under
(15) Normal production on the farm
The term "normal production on the farm" means the sum of the expected revenue for all crops on the farm, as determined under subsection (b)(6)(A).
(16) Qualifying natural disaster declaration
The term "qualifying natural disaster declaration" means a natural disaster declared by the Secretary for production losses under
(17) Secretary
The term "Secretary" means the Secretary of Agriculture.
(18) Socially disadvantaged farmer or rancher
The term "socially disadvantaged farmer or rancher" has the meaning given the term in section 2279(e) 1 of this title.
(19) State
The term "State" means—
(A) a State;
(B) the District of Columbia;
(C) the Commonwealth of Puerto Rico; and
(D) any other territory or possession of the United States.
(20) Trust Fund
The term "Trust Fund" means the Agricultural Disaster Relief Trust Fund established under
(21) United States
The term "United States" when used in a geographical sense, means all of the States.
(b) Supplemental revenue assistance payments
(1) Payments
(A) In general
The Secretary shall use such sums as are necessary from the Trust Fund to make crop disaster assistance payments to eligible producers on farms in disaster counties that have incurred crop production losses or crop quality losses, or both, during the crop year.
(B) Crop loss
To be eligible for crop loss assistance under this subsection, the actual production on the farm for at least 1 crop of economic significance shall be reduced by at least 10 percent due to disaster, adverse weather, or disaster-related conditions.
(2) Amount
(A) In general
Subject to subparagraph (B), the Secretary shall provide crop disaster assistance payments under this section to an eligible producer on a farm in an amount equal to 60 percent of the difference between—
(i) the disaster assistance program guarantee, as described in paragraph (3); and
(ii) the total farm revenue for a farm, as described in paragraph (4).
(B) Limitation
The disaster assistance program guarantee for a crop used to calculate the payments for a farm under subparagraph (A)(i) may not be greater than 90 percent of the sum of the expected revenue, as described in paragraph (5) for each of the crops on a farm, as determined by the Secretary.
(C) Exclusion of subsequently planted crops
In calculating the disaster assistance program guarantee under paragraph (3) and the total farm revenue under paragraph (4), the Secretary shall not consider the value of any crop that—
(i) is produced on land that is not eligible for a policy or plan of insurance under subchapter I or assistance under the noninsured crop assistance program; or
(ii) is subsequently planted on the same land during the same crop year as the crop for which disaster assistance is provided under this subsection, except in areas in which double-cropping is a normal practice, as determined by the Secretary.
(3) Supplemental revenue assistance program guarantee
(A) In general
Except as otherwise provided in this paragraph, the supplemental assistance program guarantee shall be the sum obtained by adding—
(i) for each insurable commodity on the farm, 115 percent of the product obtained by multiplying—
(I) a payment rate for the commodity that is equal to the price election for the commodity elected by the eligible producer;
(II) the payment acres for the commodity that is equal to the number of acres planted, or prevented from being planted, to the commodity;
(III) the payment yield for the commodity that is equal to the percentage of the crop insurance yield elected by the producer of the higher of—
(aa) the adjusted actual production history yield; or
(bb) the counter-cyclical program payment yield for each crop; and
(ii) for each noninsurable commodity on a farm, 120 percent of the product obtained by multiplying—
(I) a payment rate for the commodity that is equal to 100 percent of the noninsured crop assistance program established price for the commodity;
(II) the payment acres for the commodity that is equal to the number of acres planted, or prevented from being planted, to the commodity; and
(III) the payment yield for the commodity that is equal to 50 percent of the higher of—
(aa) the adjusted noninsured crop assistance program yield; or
(bb) the counter-cyclical program payment yield for each crop.
(B) Adjustment insurance guarantee
Notwithstanding subparagraph (A), in the case of an insurable commodity for which a plan of insurance provides for an adjustment in the guarantee, such as in the case of prevented planting, the adjusted insurance guarantee shall be the basis for determining the disaster assistance program guarantee for the insurable commodity.
(C) Adjusted assistance level
Notwithstanding subparagraph (A), in the case of a noninsurable commodity for which the noninsured crop assistance program provides for an adjustment in the level of assistance, such as in the case of unharvested crops, the adjusted assistance level shall be the basis for determining the disaster assistance program guarantee for the noninsurable commodity.
(D) Equitable treatment for non-yield based policies
The Secretary shall establish equitable treatment for non-yield based policies and plans of insurance, such as the Adjusted Gross Revenue Lite insurance program.
(4) Farm revenue
(A) In general
For purposes of this subsection, the total farm revenue for a farm,2 shall equal the sum obtained by adding—
(i) the estimated actual value for each crop produced on a farm by using the product obtained by multiplying—
(I) the actual production by crop on a farm for purposes of determining losses under subchapter I or the noninsured crop assistance program; and
(II) subject to subparagraphs (B) and (C), to the extent practicable, the national average market price received for the marketing year, as determined by the Secretary;
(ii) 15 percent of amount of any direct payments made to the producer under sections 1103 and 1303 1 of the Food, Conservation, and Energy Act of 2008 [
(iii) the total amount of any counter-cyclical payments made to the producer under sections 1104 and 1304 1 of the Food, Conservation, and Energy Act of 2008 [
(iv) the total amount of any loan deficiency payments, marketing loan gains, and marketing certificate gains made to the producer under subtitles B and C 1 of the Food, Conservation, and Energy Act of 2008 [
(v) the amount of payments for prevented planting on a farm;
(vi) the amount of crop insurance indemnities received by an eligible producer on a farm for each crop on a farm;
(vii) the amount of payments an eligible producer on a farm received under the noninsured crop assistance program for each crop on a farm; and
(viii) the value of any other natural disaster assistance payments provided by the Federal Government to an eligible producer on a farm for each crop on a farm for the same loss for which the eligible producer is seeking assistance.
(B) Adjustment
The Secretary shall adjust the average market price received by the eligible producer on a farm—
(i) to reflect the average quality discounts applied to the local or regional market price of a crop or mechanically harvested forage due to a reduction in the intrinsic characteristics of the production resulting from adverse weather, as determined annually by the State office of the Farm Service Agency;
(ii) to account for a crop the value of which is reduced due to excess moisture resulting from a disaster-related condition; and
(iii) as the Secretary determines appropriate, to reflect regional variations in a manner consistent with the operation of the crop insurance program under subchapter I and the noninsured crop assistance program.
(C) Maximum amount for certain crops
With respect to a crop for which an eligible producer on a farm receives assistance under the noninsured crop assistance program, the national average market price received during the marketing year shall be an amount not more than 100 percent of the price of the crop established under the noninsured crop assistance program.
(5) Expected revenue
The expected revenue for each crop on a farm shall equal—
(A) for each insurable commodity, the product obtained by multiplying—
(i) the greater of—
(I) the adjusted actual production history yield of the eligible producer on a farm; and
(II) the counter-cyclical program payment yield;
(ii) the acreage planted or prevented from being planted for each crop; and
(iii) 100 percent of the price election for the commodity used to calculate an indemnity for an applicable policy of insurance if an indemnity is triggered; and
(B) for each noninsurable crop, the product obtained by multiplying—
(i) 100 percent of the adjusted noninsured crop assistance program yield;
(ii) the acreage planted or prevented from being planted for each crop; and
(iii) 100 percent of the noninsured crop assistance program price for each of the crops on a farm.
(6) Production on the farm
(A) Normal production on the farm
The normal production on the farm shall equal the sum of the expected revenue for each crop on a farm as determined under paragraph (5).
(B) Actual production on the farm
The actual production on the farm shall equal the sum obtained by adding—
(i) for each insurable commodity on the farm, the product obtained by multiplying—
(I) 100 percent of the price election for the commodity used to calculate an indemnity for an applicable policy of insurance if an indemnity is triggered; and
(II) the quantity of the commodity produced on the farm, adjusted for quality losses; and
(ii) for each noninsurable commodity on a farm, the product obtained by multiplying—
(I) 100 percent of the noninsured crop assistance program established price for the commodity; and
(II) the quantity of the commodity produced on the farm, adjusted for quality losses.
(c) Livestock indemnity payments
(1) Payments
The Secretary shall make livestock indemnity payments to eligible producers on farms that have incurred livestock death losses in excess of the normal mortality due to adverse weather, as determined by the Secretary, during the calendar year, including losses due to hurricanes, floods, blizzards, disease, wildfires, extreme heat, and extreme cold.
(2) Payment rates
Indemnity payments to an eligible producer on a farm under paragraph (1) shall be made at a rate of 75 percent of the market value of the applicable livestock on the day before the date of death of the livestock, as determined by the Secretary.
(3) Authorization of appropriations
There is authorized to be appropriated to carry out this subsection $80,000,000 for each of fiscal years 2012 and 2013.
(d) Livestock forage disaster program
(1) Definitions
In this subsection:
(A) Covered livestock
(i) In general
Except as provided in clause (ii), the term "covered livestock" means livestock of an eligible livestock producer that, during the 60 days prior to the beginning date of a qualifying drought or fire condition, as determined by the Secretary, the eligible livestock producer—
(I) owned;
(II) leased;
(III) purchased;
(IV) entered into a contract to purchase;
(V) is a contract grower; or
(VI) sold or otherwise disposed of due to qualifying drought conditions during—
(aa) the current production year; or
(bb) subject to paragraph (3)(B)(ii), 1 or both of the 2 production years immediately preceding the current production year.
(ii) Exclusion
The term "covered livestock" does not include livestock that were or would have been in a feedlot, on the beginning date of the qualifying drought or fire condition, as a part of the normal business operation of the eligible livestock producer, as determined by the Secretary.
(B) Drought monitor
The term "drought monitor" means a system for classifying drought severity according to a range of abnormally dry to exceptional drought, as defined by the Secretary.
(C) Eligible livestock producer
(i) In general
The term "eligible livestock producer" means an eligible producer on a farm that—
(I) is an owner, cash or share lessee, or contract grower of covered livestock that provides the pastureland or grazing land, including cash-leased pastureland or grazing land, for the livestock;
(II) provides the pastureland or grazing land for covered livestock, including cash-leased pastureland or grazing land that is physically located in a county affected by drought;
(III) certifies grazing loss; and
(IV) meets all other eligibility requirements established under this subsection.
(ii) Exclusion
The term "eligible livestock producer" does not include an owner, cash or share lessee, or contract grower of livestock that rents or leases pastureland or grazing land owned by another person on a rate-of-gain basis.
(D) Normal carrying capacity
The term "normal carrying capacity", with respect to each type of grazing land or pastureland in a county, means the normal carrying capacity, as determined under paragraph (3)(D)(i), that would be expected from the grazing land or pastureland for livestock during the normal grazing period, in the absence of a drought or fire that diminishes the production of the grazing land or pastureland.
(E) Normal grazing period
The term "normal grazing period", with respect to a county, means the normal grazing period during the calendar year for the county, as determined under paragraph (3)(D)(i).
(2) Program
The Secretary shall provide compensation for losses to eligible livestock producers due to grazing losses for covered livestock due to—
(A) a drought condition, as described in paragraph (3); or
(B) fire, as described in paragraph (4).
(3) Assistance for losses due to drought conditions
(A) Eligible losses
An eligible livestock producer may receive assistance under this subsection only for grazing losses for covered livestock that occur on land that—
(i) is native or improved pastureland with permanent vegetative cover; or
(ii) is planted to a crop planted specifically for the purpose of providing grazing for covered livestock.
(B) Monthly payment rate
(i) In general
Except as provided in clause (ii), the payment rate for assistance under this paragraph for 1 month shall, in the case of drought, be equal to 60 percent of the lesser of—
(I) the monthly feed cost for all covered livestock owned or leased by the eligible livestock producer, as determined under subparagraph (C); or
(II) the monthly feed cost calculated by using the normal carrying capacity of the eligible grazing land of the eligible livestock producer.
(ii) Partial compensation
In the case of an eligible livestock producer that sold or otherwise disposed of covered livestock due to drought conditions in 1 or both of the 2 production years immediately preceding the current production year, as determined by the Secretary, the payment rate shall be 80 percent of the payment rate otherwise calculated in accordance with clause (i).
(C) Monthly feed cost
(i) In general
The monthly feed cost shall equal the product obtained by multiplying—
(I) 30 days;
(II) a payment quantity that is equal to the feed grain equivalent, as determined under clause (ii); and
(III) a payment rate that is equal to the corn price per pound, as determined under clause (iii).
(ii) Feed grain equivalent
For purposes of clause (i)(I), the feed grain equivalent shall equal—
(I) in the case of an adult beef cow, 15.7 pounds of corn per day; or
(II) in the case of any other type of weight of livestock, an amount determined by the Secretary that represents the average number of pounds of corn per day necessary to feed the livestock.
(iii) Corn price per pound
For purposes of clause (i)(II), the corn price per pound shall equal the quotient obtained by dividing—
(I) the higher of—
(aa) the national average corn price per bushel for the 12-month period immediately preceding March 1 of the year for which the disaster assistance is calculated; or
(bb) the national average corn price per bushel for the 24-month period immediately preceding that March 1; by
(II) 56.
(D) Normal grazing period and drought monitor intensity
(i) FSA county committee determinations
(I) In general
The Secretary shall determine the normal carrying capacity and normal grazing period for each type of grazing land or pastureland in the county served by the applicable committee.
(II) Changes
No change to the normal carrying capacity or normal grazing period established for a county under subclause (I) shall be made unless the change is requested by the appropriate State and county Farm Service Agency committees.
(ii) Drought intensity
(I) D2
An eligible livestock producer that owns or leases grazing land or pastureland that is physically located in a county that is rated by the U.S. Drought Monitor as having a D2 (severe drought) intensity in any area of the county for at least 8 consecutive weeks during the normal grazing period for the county, as determined by the Secretary, shall be eligible to receive assistance under this paragraph in an amount equal to 1 monthly payment using the monthly payment rate determined under subparagraph (B).
(II) D3
An eligible livestock producer that owns or leases grazing land or pastureland that is physically located in a county that is rated by the U.S. Drought Monitor as having at least a D3 (extreme drought) intensity in any area of the county at any time during the normal grazing period for the county, as determined by the Secretary, shall be eligible to receive assistance under this paragraph—
(aa) in an amount equal to 2 monthly payments using the monthly payment rate determined under subparagraph (B); or
(bb) if the county is rated as having a D3 (extreme drought) intensity in any area of the county for at least 4 weeks during the normal grazing period for the county, or is rated as having a D4 (exceptional drought) intensity in any area of the county at any time during the normal grazing period, in an amount equal to 3 monthly payments using the monthly payment rate determined under subparagraph (B).
(4) Assistance for losses due to fire on public managed land
(A) In general
An eligible livestock producer may receive assistance under this paragraph only if—
(i) the grazing losses occur on rangeland that is managed by a Federal agency; and
(ii) the eligible livestock producer is prohibited by the Federal agency from grazing the normal permitted livestock on the managed rangeland due to a fire.
(B) Payment rate
The payment rate for assistance under this paragraph shall be equal to 50 percent of the monthly feed cost for the total number of livestock covered by the Federal lease of the eligible livestock producer, as determined under paragraph (3)(C).
(C) Payment duration
(i) In general
Subject to clause (ii), an eligible livestock producer shall be eligible to receive assistance under this paragraph for the period—
(I) beginning on the date on which the Federal agency excludes the eligible livestock producer from using the managed rangeland for grazing; and
(II) ending on the last day of the Federal lease of the eligible livestock producer.
(ii) Limitation
An eligible livestock producer may only receive assistance under this paragraph for losses that occur on not more than 180 days per year.
(5) Minimum risk management purchase requirements
(A) In general
Except as otherwise provided in this paragraph, a livestock producer shall only be eligible for assistance under this subsection if the livestock producer—
(i) obtained a policy or plan of insurance under subchapter I for the grazing land incurring the losses for which assistance is being requested; or
(ii) filed the required paperwork, and paid the administrative fee by the applicable State filing deadline, for the noninsured crop assistance program for the grazing land incurring the losses for which assistance is being requested.
(B) Waiver for socially disadvantaged, limited resource, or beginning farmer or rancher
In the case of an eligible livestock producer that is a socially disadvantaged farmer or rancher or limited resource or beginning farmer or rancher, as determined by the Secretary, the Secretary may—
(i) waive subparagraph (A); and
(ii) provide disaster assistance under this subsection at a level that the Secretary determines to be equitable and appropriate.
(C) Waiver for 2008 calendar year
In the case of an eligible livestock producer that suffered losses on grazing land during the 2008 calendar year but does not meet the requirements of subparagraph (A), the Secretary shall waive subparagraph (A) if the eligible livestock producer pays a fee in an amount equal to the applicable noninsured crop assistance program fee or catastrophic risk protection plan fee required under subparagraph (A) to the Secretary not later than 90 days after the date of enactment of this subchapter.
(D) Equitable relief
(i) In general
The Secretary may provide equitable relief to an eligible livestock producer that is otherwise ineligible or unintentionally fails to meet the requirements of subparagraph (A) for the grazing land incurring the loss on a case-by-case basis, as determined by the Secretary.
(ii) 2008 calendar year
In the case of an eligible livestock producer that suffered losses on grazing land during the 2008 calendar year, the Secretary shall take special consideration to provide equitable relief in cases in which the eligible livestock producer failed to meet the requirements of subparagraph (A) due to the enactment of this subchapter after the closing date of sales periods for crop insurance under subchapter I and the noninsured crop assistance program.
(6) No duplicative payments
(A) In general
An eligible livestock producer may elect to receive assistance for grazing or pasture feed losses due to drought conditions under paragraph (3) or fire under paragraph (4), but not both for the same loss, as determined by the Secretary.
(B) Relationship to supplemental revenue assistance
An eligible livestock producer that receives assistance under this subsection may not also receive assistance for losses to crops on the same land with the same intended use under subsection (b).
(7) Authorization of appropriations
There is authorized to be appropriated to carry out this subsection $400,000,000 for each of fiscal years 2012 and 2013.
(e) Emergency assistance for livestock, honey bees, and farm-raised fish
(1) In general
The Secretary shall provide emergency relief to eligible producers of livestock, honey bees, and farm-raised fish to aid in the reduction of losses due to disease, adverse weather, or other conditions, such as blizzards and wildfires, as determined by the Secretary, that are not covered under subsection (b), (c), or (d).
(2) Use of funds
Funds made available under this subsection shall be used to reduce losses caused by feed or water shortages, disease, or other factors as determined by the Secretary.
(3) Availability of funds
Any funds made available under this subsection shall remain available until expended.
(4) Authorization of appropriations
There is authorized to be appropriated to carry out this subsection $50,000,000 for each of fiscal years 2012 and 2013.
(f) Tree assistance program
(1) Definitions
In this subsection:
(A) Eligible orchardist
The term "eligible orchardist" means a person that produces annual crops from trees for commercial purposes.
(B) Natural disaster
The term "natural disaster" means plant disease, insect infestation, drought, fire, freeze, flood, earthquake, lightning, or other occurrence, as determined by the Secretary.
(C) Nursery tree grower
The term "nursery tree grower" means a person who produces nursery, ornamental, fruit, nut, or Christmas trees for commercial sale, as determined by the Secretary.
(D) Tree
The term "tree" includes a tree, bush, and vine.
(2) Eligibility
(A) Loss
Subject to subparagraph (B), the Secretary shall provide assistance—
(i) under paragraph (3) to eligible orchardists and nursery tree growers that planted trees for commercial purposes but lost the trees as a result of a natural disaster, as determined by the Secretary; and
(ii) under paragraph (3)(B) to eligible orchardists and nursery tree growers that have a production history for commercial purposes on planted or existing trees but lost the trees as a result of a natural disaster, as determined by the Secretary.
(B) Limitation
An eligible orchardist or nursery tree grower shall qualify for assistance under subparagraph (A) only if the tree mortality of the eligible orchardist or nursery tree grower, as a result of damaging weather or related condition, exceeds 15 percent (adjusted for normal mortality).
(3) Assistance
Subject to paragraph (4), the assistance provided by the Secretary to eligible orchardists and nursery tree growers for losses described in paragraph (2) shall consist of—
(A)(i) reimbursement of 70 percent of the cost of replanting trees lost due to a natural disaster, as determined by the Secretary, in excess of 15 percent mortality (adjusted for normal mortality); or
(ii) at the option of the Secretary, sufficient seedlings to reestablish a stand; and
(B) reimbursement of 50 percent of the cost of pruning, removal, and other costs incurred by an eligible orchardist or nursery tree grower to salvage existing trees or, in the case of tree mortality, to prepare the land to replant trees as a result of damage or tree mortality due to a natural disaster, as determined by the Secretary, in excess of 15 percent damage or mortality (adjusted for normal tree damage and mortality).
(4) Limitations on assistance
(A) Definitions of legal entity and person
In this paragraph, the terms "legal entity" and "person" have the meaning given those terms in section 1001(a) of the Food Security Act of 1985 (
(B) Amount
The total amount of payments received, directly or indirectly, by a person or legal entity (excluding a joint venture or general partnership) under this subsection may not exceed $100,000 for any crop year, or an equivalent value in tree seedlings.
(C) Acres
The total quantity of acres planted to trees or tree seedlings for which a person or legal entity shall be entitled to receive payments under this subsection may not exceed 500 acres.
(5) Authorization of appropriations
There is authorized to be appropriated to carry out this subsection $20,000,000 for each of fiscal years 2012 and 2013.
(g) Risk management purchase requirement
(1) In general
Except as otherwise provided in this section, the eligible producers on a farm shall not be eligible for assistance under this section (other than subsections (c) and (d)) if the eligible producers on the farm—
(A) in the case of each insurable commodity of the eligible producers on the farm, excluding grazing land, did not obtain a policy or plan of insurance under subchapter I (excluding a crop insurance pilot program under that subchapter); or
(B) in the case of each noninsurable commodity of the eligible producers on the farm, did not file the required paperwork, and pay the administrative fee by the applicable State filing deadline, for the noninsured crop assistance program.
(2) Minimum
To be considered to have obtained insurance under paragraph (1)(A), an eligible producer on a farm shall have obtained a policy or plan of insurance with not less than 50 percent yield coverage at 55 percent of the insurable price for each crop planted or intended to be planted for harvest on a whole farm.
(3) Waiver for socially disadvantaged, limited resource, or beginning farmer or rancher
With respect to eligible producers that are socially disadvantaged farmers or ranchers or limited resource or beginning farmers or ranchers, as determined by the Secretary, the Secretary may—
(A) waive paragraph (1); and
(B) provide disaster assistance under this section at a level that the Secretary determines to be equitable and appropriate.
(4) Waivers for certain crop years
(A) 2008 crop year
In the case of an eligible producer that suffered losses in an insurable commodity or noninsurable commodity during the 2008 crop year but does not meet the requirements of paragraph (1), the Secretary shall waive paragraph (1) if the eligible producer pays a fee in an amount equal to the applicable noninsured crop assistance program fee or catastrophic risk protection plan fee required under paragraph (1) to the Secretary not later than 90 days after the date of enactment of this subchapter.
(B) 2009 crop year
In the case of an insurable commodity or noninsurable commodity for the 2009 crop year that does not meet the requirements of paragraph (1) and the relevant crop insurance program sales closing date or noninsured crop assistance program fee payment date was prior to August 14, 2008, the Secretary shall waive paragraph (1) if the eligible producer of the insurable commodity or noninsurable commodity pays a fee in an amount equal to the applicable noninsured crop assistance program fee or catastrophic risk protection plan fee required under paragraph (1) to the Secretary not later than 90 days after October 13, 2008.
(5) Equitable relief
(A) In general
The Secretary may provide equitable relief to eligible producers on a farm that are otherwise ineligible or unintentionally fail to meet the requirements of paragraph (1) for 1 or more crops on a farm on a case-by-case basis, as determined by the Secretary.
(B) 2008 crop year
In the case of eligible producers on a farm that suffered losses in an insurable commodity or noninsurable commodity during the 2008 crop year, the Secretary shall take special consideration to provide equitable relief in cases in which the eligible producers failed to meet the requirements of paragraph (1) due to the enactment of this subchapter after the closing date of sales periods for crop insurance under subchapter I and the noninsured crop assistance program.
(6) De minimis exception
(A) In general
For purposes of assistance under subsection (b), at the option of an eligible producer on a farm, the Secretary shall waive paragraph (1)—
(i) in the case of a portion of the total acreage of a farm of the eligible producer that is not of economic significance on the farm, as established by the Secretary; or
(ii) in the case of a crop for which the administrative fee required for the purchase of noninsured crop disaster assistance coverage exceeds 10 percent of the value of that coverage.
(B) Treatment of acreage
The Secretary shall not consider the value of any crop exempted under subparagraph (A) in calculating the supplemental revenue assistance program guarantee under subsection (b)(3) and the total farm revenue under subsection (b)(4).
(7) 2008 transition assistance
(A) In general
Eligible producers on a farm described in subparagraph (A) of paragraph (4) that failed to timely pay the appropriate fee described in that subparagraph shall be eligible for assistance under this section in accordance with subparagraph (B) if the eligible producers on the farm—
(i) pay the appropriate fee described in paragraph (4)(A) not later than 90 days after February 17, 2009; and
(ii)(I) in the case of each insurable commodity of the eligible producers on the farm, excluding grazing land, agree to obtain a policy or plan of insurance under subchapter I (excluding a crop insurance pilot program under that subchapter) for the next insurance year for which crop insurance is available to the eligible producers on the farm at a level of coverage equal to 70 percent or more of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage; and
(II) in the case of each noninsurable commodity of the eligible producers on the farm, agree to file the required paperwork, and pay the administrative fee by the applicable State filing deadline, for the noninsured crop assistance program for the next year for which a policy is available.
(B) Amount of assistance
Eligible producers on a farm that meet the requirements of subparagraph (A) shall be eligible to receive assistance under this section as if the eligible producers on the farm—
(i) in the case of each insurable commodity of the eligible producers on the farm, had obtained a policy or plan of insurance for the 2008 crop year at a level of coverage not to exceed 70 percent or more of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage; and
(ii) in the case of each noninsurable commodity of the eligible producers on the farm, had filed the required paperwork, and paid the administrative fee by the applicable State filing deadline, for the noninsured crop assistance program for the 2008 crop year, except that in determining the level of coverage, the Secretary shall use 70 percent of the applicable yield.
(C) Equitable relief
Except as provided in subparagraph (D), eligible producers on a farm that met the requirements of paragraph (1) before the deadline described in paragraph (4)(A) and are eligible to receive, a disaster assistance payment under this section for a production loss during the 2008 crop year shall be eligible to receive an amount equal to the greater of—
(i) the amount that would have been calculated under subparagraph (B) if the eligible producers on the farm had paid the appropriate fee under that subparagraph; or
(ii) the amount that would have been calculated under subparagraph (A) of subsection (b)(3) if—
(I) in clause (i) of that subparagraph, "120 percent" is substituted for "115 percent"; and
(II) in clause (ii) of that subparagraph, "125" is substituted for "120 percent".
(D) Limitation
For amounts made available under this paragraph, the Secretary may make such adjustments as are necessary to ensure that no producer receives a payment under this paragraph for an amount in excess of the assistance received by a similarly situated producer that had purchased the same or higher level of crop insurance prior to February 17, 2009.
(E) Authority of the Secretary
The Secretary may provide such additional assistance as the Secretary considers appropriate to provide equitable treatment for eligible producers on a farm that suffered production losses in the 2008 crop year that result in multiyear production losses, as determined by the Secretary.
(F) Lack of access
Notwithstanding any other provision of this section, the Secretary may provide assistance (including multiyear assistance) under this section to eligible producers on a farm that—
(i) suffered a production loss or multiyear production losses due to a natural cause during the 2008 crop year; and
(ii) as determined by the Secretary—
(I)(aa) except as provided in item (bb), lack access to a policy or plan of insurance under subchapter I; or
(bb) do not qualify for a written agreement because 1 or more farming practices, which the Secretary has determined are good farming practices, of the eligible producers on the farm differ significantly from the farming practices used by producers of the same crop in other regions of the United States; and
(II) are not eligible for the noninsured crop disaster assistance program established by
(h) Payment limitations
(1) Definitions of legal entity and person
In this subsection, the terms "legal entity" and "person" have the meaning given those terms in section 1001(a) of the Food Security Act of 1985 (
(2) Amount
The total amount of disaster assistance payments received, directly or indirectly, by a person or legal entity (excluding a joint venture or general partnership) under this section (excluding payments received under subsection (f)) may not exceed $100,000 for any crop year.
(3) AGI limitation
Section 1001D of the Food Security Act of 1985 (
(4) Direct attribution
Subsections (e) and (f) of section 1001 of the Food Security Act of 1985 (
(5) Transition rule
Sections 1001, 1001A, 1001B, and 1001D of the Food Security Act of 1985 [
(i) Period of effectiveness
This section shall be effective only for losses that are incurred as the result of a disaster, adverse weather, or other environmental condition that occurs on or before September 30, 2011, or, in the case of subsections (c) through (f), September 30, 2013 4 as determined by the Secretary.
(j) No duplicative payments
In implementing any other program which makes disaster assistance payments (except for indemnities made under subchapter I and
(k) Application
(1) In general
Subject to paragraph (2) and notwithstanding any provision of subchapter I, subchapter I shall not apply to this subchapter.
(2) Cross references
Paragraph (1) shall not apply to a specific reference in this subchapter to a provision of subchapter I.
(Feb. 16, 1938, ch. 30, title V, §531, as added
Editorial Notes
References in Text
Sections 1103 and 1303 of the Food, Conservation, and Energy Act of 2008, referred to in subsec. (b)(4)(A)(ii), were repealed by
Sections 1104 and 1304 of the Food, Conservation, and Energy Act of 2008, referred to in subsec. (b)(4)(A)(iii), were repealed by
Section 1105 of the Food, Conservation, and Energy Act of 2008, referred to in subsec. (b)(4)(A)(iii), was repealed by
The Food, Conservation, and Energy Act of 2008, referred to in subsec. (b)(4)(A)(iv), is
The date of enactment of this subchapter, referred to in subsecs. (d)(5)(C), (D)(ii) and (g)(4)(A), (5)(B), is the date of enactment of
Codification
Section 2(a) of
Amendments
2014—Subsec. (d)(3)(A).
2013—Subsec. (a)(5).
Subsec. (c)(1).
Subsec. (c)(3).
Subsec. (d)(2).
Subsec. (d)(7).
Subsec. (e)(1).
Subsec. (e)(4).
Subsec. (f)(2)(A).
Subsec. (f)(5).
Subsec. (i).
2009—Subsec. (g)(7).
Subsec. (g)(7)(F).
Subsec. (g)(7)(F)(i).
2008—Subsec. (a)(2).
Subsec. (a)(3).
Subsec. (a)(3)(B).
Subsec. (a)(4).
Subsec. (a)(5).
Subsec. (a)(5)(B)(ii).
Subsec. (a)(6).
Subsec. (a)(7).
Subsec. (a)(7)(A).
Subsec. (a)(7)(C).
Subsec. (a)(8) to (14).
Subsec. (a)(15).
Subsec. (a)(16) to (21).
Subsec. (b)(1).
Subsec. (b)(2)(C).
Subsec. (b)(3)(A)(ii)(III).
Subsec. (b)(3)(A)(ii)(III)(aa).
Subsec. (b)(4)(A)(i).
"(I) the actual crop acreage harvested by an eligible producer on a farm;
"(II) the estimated actual yield of the crop production; and".
Subsec. (b)(4)(B)(iii).
Subsec. (b)(5).
Subsec. (b)(5)(A).
Subsec. (b)(5)(A)(i).
Subsec. (b)(5)(A)(iii).
Subsec. (b)(5)(B).
Subsec. (b)(5)(B)(ii), (iii).
Subsec. (b)(6).
Subsec. (d)(5)(B)(ii).
Subsec. (f)(2)(A).
Subsec. (g)(1).
Subsec. (g)(1)(A).
Subsec. (g)(2).
Subsec. (g)(4).
Subsec. (g)(6).
Subsec. (h)(5).
Statutory Notes and Related Subsidiaries
Effective Date of 2013 Amendment
Effective Date
Enactment of this section and repeal of
Rulemaking Procedures
Transition
[
1 See References in Text note below.
2 So in original. The comma probably should not appear.
3 So in original. Probably should be followed by a second closing parenthesis.